Honeywell International, Inc.

Material Facts

• Honeywell has performed government contracts subject to the Cost Accounting Standards since the 1980s.
• SGP manufactured ring laser gyros at a Minneapolis facility and transferred some gyros to Honeywell's Coons Rapids segment for incorporation into products for commercial customers.
• SGP disclosed that it used a total cost input base.
• When SGP transferred the gyros, it transferred the associated labor, materials, and overhead costs from SGP's allocation base to Coons Rapids, while SGP retained its G&A costs.
• The DACO's claim alleged violations of CAS 410-40(b)(1), 410-50(d), 410-50(f), and SGP's disclosed practice of using a total cost input base.
• DCAA prepared a rough order of magnitude used by the DACO to estimate the effect of the higher G&A rate on government contract costs.
• The gyro costs transferred to Coons Rapids included direct costs and overhead.
• DCAA concluded in an audit report that the gyro line was a final accumulation point in SGP's system.

Parties

Appellant

Honeywell International, Inc.

Respondent Agency

Defense Contract Management Agency

Contract Number

FA8576-20-C-0001