Raytheon Company

Material Facts

• The contract was identified as a Labor-Hour, Time-and-Materials, Services and Research and Development contract, with specified efforts performed on a Cost-Plus-Fixed-Fee basis for engineering services associated with the Patriot Weapon System.
• Raytheon submitted certified corporate and Integrated Defense Systems final indirect cost proposals for the relevant years.
• Raytheon had advance agreements addressing the allowability and withdrawal factors for aircraft fractional lease costs and later entered an advance agreement concerning Challenger 604 aircraft costs.
• Raytheon's 2004 corporate proposal included aircraft fractional lease costs without applying the applicable agreed withdrawal factor and included Challenger 604 costs using a placeholder recovery factor before the parties executed a later advance agreement.
• Raytheon's Washington Office performed both allowable and unallowable activities, and Raytheon used a ratio-based method to withdraw lobbying-related salary costs.
• The lobbying withdrawal calculation contained missing time records, proration errors, omissions, and an erroneous inclusion of executive hours that had been withdrawn elsewhere.
• Raytheon paid Icent for design and construction of an M&A Support Center Application intended for general planning and specific M&A purposes, but the project was terminated before completion and was never used in connection with an M&A target.
• Raytheon's consultant costs included fees for Stephen Stanvick and VADM J. Guy Reynolds, both of whom had consulting agreements and relevant experience.
• Stanvick's work was substantially technical and classified, and much of his work product was oral or could not be publicly disseminated or retained.
• Reynolds's invoices generally described his services, and credible testimony established that he prepared trip reports and generated written communications even though the 2005 reports were unavailable.
• DCAA audited the relevant incurred cost proposals and questioned costs as unallowable or expressly unallowable, after which DCMA contracting officers assessed penalties and interest.

Parties

Appellant

Raytheon Company

Respondent Agency

Defense Contract Management Agency

Contracting Agency

U.S. Army Aviation and Missile Command

Contract Number

W31P4Q-04-C-0020