Lockheed Martin Services, Inc.

Material Facts

• DFAS awarded the contract to ACS Government Solutions Group, Inc., for performance of the Defense Retired/Annuitant Pay System.
• The contract distinguished among government-furnished equipment, government-furnished property, and government-furnished services, and listed the DRAS Automated Information System as government-furnished property.
• MIRORS was approximately ten years old when ACS began performance, experienced increasing hardware failures, and was no longer supported by its manufacturer.
• The contract did not require ACS to replace MIRORS, and DFAS refused to pay for development of a MIRORS replacement when ACS requested payment.
• LMSI purchased ACS and developed RAPID using DOE-owned E-STARS software and LMSI-owned derivative software.
• LMSI implemented RAPID in December 2004 and used it for approximately five years before DFAS decided to bring the work back in-house.
• DFAS requested a DCAA audit of the RAPID portion of LMSI's transition proposal.
• Modification No. P00089 paid LMSI a portion of the RAPID costs, included a capped amount, and provided for price redetermination or repayment if the government had overpaid.
• LMSI submitted a certification stating that the questioned original-investment costs had not previously been billed or charged to DFAS or another United States Government entity.
• The original development cost of RAPID was documented through an amortization table, and LMSI paid that cost out of profits from Contract 0002.
• Hanford estimated that 25 percent of identified labor costs related to RAPID enhancements, producing the enhancement amount used by the Board.
• DFAS issued Modification No. P00092 reducing the user-license fee to zero and asserting that LMSI was indebted to DFAS for that amount.

Parties

Appellant

Lockheed Martin Services, Inc.

Respondent Agency

Defense Finance & Accounting Service

Contracting Agency

Defense Finance & Accounting Service

Contract Number

MDA220-0l-D-0002