Raytheon Company, Space & Airborne Systems

Material Facts

• Raytheon submitted Revision 1, Revision 5, and Revision 15 to its CAS Disclosure Statement, each containing changes to cost accounting practices.
• Revision 1 included changes relating to property accounting/property management, an offsite burden center, IT secondary pools, and fringe accommodation/composite rate.
• Revision 5 contained one cost accounting practice change.
• Revision 15 contained three cost accounting practice changes, including changes identified in the decision in part as redacted.
• Contract I incorporated FAR 52.230-2 and had an effective date of 21 February 2003.
• Contract II had an effective date of 30 December 2004 and incorporated FAR 52.230-2.
• DCAA did not complete audits of Revisions 1 and 5.
• DCAA prepared rough order of magnitude calculations for Revisions 1 and 5 using Raytheon's general dollar magnitude figures and a 30 percent increment factor.
• The Revision 15 changes were considered as a whole by DCAA to result in net decreased costs to the government, although DCAA separately calculated an amount associated with changes producing increased costs.
• The DACOs did not offset the asserted increased costs against the cost savings from other accounting-practice changes.
• The government did not allege that Raytheon was aware, or should have been aware, of the accounting change during price negotiations and failed to disclose it.
• Raytheon's accounting changes shifted costs between flexibly-priced and fixed-price contracts.

Parties

Appellant

Raytheon Company, Space & Airborne Systems

Respondent Agency

Defense Contract Management Agency

Contract Number

F04701-03-C-0008; FA8650-09-C- l 503