Energy Matter Conversion Corporation

Material Facts

• The U.S. Department of Justice investigated EMC2 for potential mischarges related to a different contract.
• The Department of the Navy awarded Contract No. N68936-09-C-0125 to EMC2, which was a cost-plus-fixed-fee contract.
• The contract included FAR clause 52.216-7, which incorporated FAR Part 31.
• EMC2 disputed the assertion that certain costs were unallowable.
• EMC2 resolved the investigations by refunding the Navy $249,850.90.
• EMC2 submitted Final Indirect Cost Rate Proposals for FY 2010 and 2011 that included legal costs.
• The Defense Contract Audit Agency audited the 2010/2011 FICRPs and concluded that EMC2 should be penalized for including unallowable costs.
• The contracting officer waived penalties for the 2010/2011 FICRPs.
• The DCAA commenced an audit of the 2012/2013 FICRPs, which questioned the allowability of the legal costs.
• The contracting officer issued a final decision assessing a penalty of $53,614 due to the inclusion of the legal costs.

Parties

Appellant

Energy Matter Conversion Corporation

Respondent Agency

Department of the Navy

Contract Number

N68936-09-C-0125