Raytheon Missile Systems

Material Facts

• Raytheon submitted a CAS Disclosure Statement effective 1 January 1999 that excluded certain subcontract costs from the full burden of its overhead rates.
• Raytheon later proposed expanding the definition of major subcontracts receiving special burden and stated that the revision would also be effective as of 1 January 1999.
• NAVAIR awarded Raytheon a letter contract to remanufacture Tomahawk missiles, and Raytheon submitted a price proposal during negotiations to definitize that contract.
• Raytheon’s price proposal communicated that it was executing a subcontract with Lockheed Martin Corporation for the acquisition of certain items.
• The DCMA price analyst’s 26 July 1999 report examined Raytheon’s markup factor and disclosed the burden applied to material.
• The price analyst’s 26 August 2005 report concluded that the Lockheed Martin subcontract was not priced as a major subcontract and therefore was not receiving special burden.
• DCAA’s 22 September 2006 audit report relied on the 1999 proposal, the 2005 price-analyst report, and other 1999 materials.
• The DACO’s 29 November 2011 final decision found that Raytheon had failed to follow its revised accounting practice disclosures.

Parties

Appellant

Raytheon Missile Systems

Respondent Agency

Defense Contract Management Agency

Contracting Agency

Naval Air Systems Command (NAVAIR)

Contract Number

N00019-99-D-1016