Northrop Grumman Corporation

Material Facts

• During Fiscal Year 2012, Northrop Grumman performed flexibly-priced contracts containing FAR 52.216-7.
• Northrop Grumman's Fiscal Year 2012 incurred cost submission included pension costs incurred under certain nonqualified defined-benefit pension plans and accounted for those costs on a pay-as-you-go basis for government contract purposes.
• Certain pension-plan participants had earned compensation exceeding the limitation in FAR 31.205-6(p).
• Northrop Grumman's Retirement Benefit Formulas included amounts exceeding the applicable compensation limitation as a compensation factor.
• The contracting officer's final decision disallowed certain pension costs as directly associated costs of unallowable compensation costs.
• The final decision cited FAR 31.201-6, FAR 31.205-6(p), and FAR 52.216-7, and did not disallow the pension costs pursuant to FAR 31.201-3, FAR 31.205-6(b), or FAR 31.205-6(j).
• The government's reasonableness challenge concerned the same pension costs and the same Retirement Benefit Formulas methodology addressed by the final decision.
• Northrop Grumman's complaint included a count alleging that the disallowance was overstated, while a separate accord-and-satisfaction count had previously been dismissed.

Parties

Appellant

Northrop Grumman Corporation

Respondent Agency

Defense Contract Management Agency

Contracting Agency

Defense Contract Management Agency

Contract Number

F33657-01-C-4600