Fluor Corporation

Material Facts

• Fluor's business included government contracts subject to CAS.
• The CAS provisions at issue were CAS 403-40(a)(I) and CAS 403-40(b)(4).
• Fluor maintained a corporate-office Burden & Benefits indirect cost pool containing payroll taxes, health insurance, life insurance, and other employee benefits paid by the corporate office.
• The allocation base for the Burden & Benefits pool was described in Fluor's CASB Disclosure Statements as total office and field assigned salaried staff base compensation working time labor associated with Fluor domestic segments.
• Fluor's defined Base Compensation included foreign service incentives and foreign hardship allowances in addition to base salary.
• DCAA knew in August 2004 that Fluor was paying substantial hourly premium pay uplifts to employees stationed in Iraq.
• DCAA completed a CAS 403 compliance audit of Fluor's corporate-office expenses allocated to business segments on 27 September 2005.
• The ACO determined that Fluor's Burden & Benefits allocation base was not representative of the factors on which the total Burden & Benefits pool payments were based.
• The government claim covered increased costs associated with alleged CAS-noncompliant billings during fiscal years 2004 through 2010.

Parties

Appellant

Fluor Corporation

Respondent Agency

Defense Contract Management Agency

Contract Number

W52P1J-07-D-0008