Science Applications International Corporation

Material Facts

• SAIC's contract included FAR 52.230-2, FAR 52.230-3, and FAR 52.230-6.
• SAIC adopted eleven unilateral cost accounting practice changes effective at the beginning of fiscal year 2019.
• SAIC held approximately 1,200 active government contracts, including 793 subject to CAS, and approximately 98 percent of its contracts were with the Federal Government.
• SAIC submitted cost-impact proposals calculating the effects of each practice change on existing contracts using estimated costs to complete.
• The CFAO corrected double-counting across fixed and flexibly-priced contracts, reducing the estimated government cost increase by approximately $80,000, and SAIC accepted the corrections.
• The parties agreed on the increased-cost amounts resulting from the practice changes.
• The CFAO determined that two changes decreased government costs, nine increased government costs, five of the increases were material, and four were immaterial.
• The CFAO considered each of the six CAS Materiality Criteria and emphasized the absolute dollar amount, impact on government funding, and administrative processing cost.
• SAIC's practice changes involved changes to allocations of indirect costs to final indirect pools or changes to indirect pool base amounts.
• The CFAO issued a final decision demanding that SAIC pay $341,947 based on $286,083 in increased costs to the government plus $55,864 in compound interest through the date of the final decision.
• The CFAO directed payment electronically or by check and stated that interest would run on payments not made within 30 days pursuant to 41 U.S.C. §7109.

Parties

Appellant

Science Applications International Corporation

Respondent Agency

Defense Contract Management Agency

Contracting Agency

Defense Contract Management Agency

Contract Number

N00024-14-C-6301