Raytheon Company and Raytheon Missile Systems

Material Facts

• Raytheon included lobbying and merger and acquisition costs in its final indirect-cost proposals for fiscal years 2007 and 2008.
• Raytheon withdrew only lobbying costs incurred during normal business hours, leaving lobbying performed after-hours included in the proposals.
• Raytheon withdrew merger and acquisition costs incurred after an indicative offer or decision to go to market, leaving planning costs incurred before those events included in the proposals.
• The evidence was insufficient to establish that Raytheon's CAS disclosure statements adequately disclosed these practices to the government or that the government consented to them.
• The contracting officer denied Raytheon's request for a penalty waiver.
• The contracting officer relied on recurring instances of expressly unallowable costs and determined that Raytheon's policies, training, and internal controls were insufficient to preclude such costs from final indirect cost rate proposals.
• Raytheon testified that it intentionally included the expressly unallowable costs in its proposals.
• The government appealed the Board's 2021 decision but did not seek reversal of the Board's denial of CAS 405 penalties.

Parties

Appellant

Raytheon Company and Raytheon Missile Systems

Respondent Agency

Defense Contract Management Agency

Contract Number

W15P7T-07-C-P207; W31P4Q-07-C-0159