Lockheed Martin Integrated Systems, Inc.

Material Facts

• The CR2 contract was a multiple-award indefinite-delivery, indefinite-quantity contract for services supporting peacetime or contingency operations and contemplated time-and-materials task orders with fully loaded labor rates.
• The S3 contract was a multiple-award indefinite-delivery, indefinite-quantity contract for a broad range of support services and contained time-and-materials, cost, and firm-fixed-price contract line item numbers.
• Both contracts incorporated FAR 52.232-7, Payments under Time-and-Materials and Labor-Hour Contracts.
• DCAA audited LMIS's fiscal year 2007 incurred costs for task orders under CR2, S3, and a third indefinite-delivery, indefinite-quantity contract.
• The audit questioned direct subcontract costs based on assist-audit support and differences between proposed and reported subcontract amounts.
• The audit questioned additional subcontractor costs at the prime-contractor level based on alleged failures to maintain documentation, manage subcontractors, and obtain or audit subcontractor incurred-cost submissions.
• The CR2 contracting officer's final decision asserted a government claim based on the audit's questioned subcontractor costs and alleged failures in subcontractor oversight.
• The S3 contracting officer's final decision asserted a government claim based on questioned and unresolved subcontractor costs identified in the audit.

Parties

Appellant

Lockheed Martin Integrated Systems, Inc.

Respondent Agency

Army

Contracting Agency

Army Communications-Electronics Command (CECOM) Acquisition Center

Contract Number

DAAB07-03-D-B009; W15P7T-06-D-E405