Claims and Disputes Litigation
We offer clients a broad and deep claims litigation practice, assisting in all aspects of government contracts litigation, including preparation and pursuit of large, complex claims against the US government and defense against government claims. We are one of the few firms with the bench strength to handle such large claims. We represent clients in matters involving noncompliance with cost accounting standards, cost disallowances, contract termination, breach, contract changes, defective pricing, Multiple Award Schedule contracts, construction contracts and many other disputes under the Contract Disputes Act. Additionally, we routinely handle disputes under subcontracts and teaming agreements. Our practice group has won a number of precedent-setting cases. Our claims and disputes work spans many industries, including defense and aerospace, construction, electronics, financial services, professional services, information technology, healthcare, pharmaceuticals, and medical devices and equipment.
When possible, our attorneys make use of alternative dispute resolution (ADR) mechanisms, including straightforward negotiations, mediation and arbitration proceedings, mini-trials, and third-party neutral advisors, saving clients time and resources. Nevertheless, we have vast experience litigating before the boards of contract appeals, the US Court of Federal Claims, and the US. Court of Appeals for the Federal Circuit, as well as a variety of state courts and Federal District courts as matters warrant.
- Defended Major Defense Contractor against government claims of government use rights in to several complex intellectual property. The government ultimately conceded to the validity of each of the contractor's asserted intellectual property rights and dropped its claim for government use rights.
- Successfully mediated appeal of claim for equitable adjustment for Private Security Contractor in connection with Department of State Task Order contract.
- Successfully settled appeal of significant claims for equitable adjustment related to background investigation contracts before the Civilian Board of Contract Appeals.
- ACADEMI LLC: We are representing ACADEMI against government claims of unallowable costs and unilateral rate designations. ACADEMI LLC, ASBCA Nos. 60886 et al.
- RAND Corporation: We represented RAND Corporation against a government claim that the company failed to comply with CAS 405 and that the company is liable for penalties under FAR 42.709-7 for inclusion of allegedly expressly unallowable costs involving advertising. Rand Corp., ASBCA No. 60642. (resolved through negotiation (August 2017)).
- Al Arrab Contracting, Inc.: We are representing ACC, a prominent Saudi construction firm, in its claim filed at the Armed Services Board of Contract Appeals against the US Army. The Army acted as contracting office for the Saudi National Guard during a complex construction project erecting three schools in Jeddah, Saudi Arabia for which ACC was prime contractor. Al Arrab Contracting, Inc., ASBCA No. 58493, 58877.
- University of Maryland: We are representing the University of Maryland involving claims for recovery of various types of leave expenses and a government counter-claim involving vacation leave expenses under a contract with the Maryland Procurement Office. University of Maryland, ASBCA Nos. 60223, 60224.
- Raytheon Company: Arnold & Porter successfully represented Raytheon Company against a government claim alleging defective pricing under the Truth in Negotiations Act. Raytheon Co., Integrated Defense Sys., ASBCA No. 60784 (resolved through negotiation (Dec. 2017).
- Raytheon Company: We successfully represented Raytheon Company against a government claim that the company failed to comply with CAS 415 and CAS 403 involving forfeitures under its deferred compensation plan. Raytheon Company, ASBCA No. 58849. (resolved through negotiation (Jan. 2017)).
- Raytheon Company: We successfully represented Raytheon Company through an Alternative Disputes Resolution process against a government claim to Government Purpose Rights in technical data and software. Raytheon Company, Space & Airborne Systems, ASBCA No. 59755 (January 3, 2017).
- Raytheon Company: We successfully represented Raytheon Company against government claims involving cost impacts for changes in cost accounting practices. In a precedent-setting decision, the ASBCA held that the government's long-standing practice of counting decreases on fixed price contracts as increased costs paid by the government was an impermissible double counting under the CAS statute and "the very definition of a windfall." The ASBCA also permitted offsets, prior to 2005, for increased costs against decreased costs for multiple changes made on the same day. Raytheon Company, Space & Airborne Systems, ASBCA Nos. 57801 et al., 15-1 BCA ¶ 36024. In a subsequent decision, the ASBCA held that the Government abused its discretion in failing to find cost impacts.
- Computer Sciences Corporation: We successfully represented CSC against a government claim that the company included certain unallowable and expressly unallowable costs as direct costs under an IRS contract. The government ultimately withdrew its claim. Computer Sciences Corp. v. Department of the Treasury, CBCA No. 4917 (Sept. 11, 2015) (dismissed).
- Raytheon Company: We successfully represented Raytheon Company against a government claim that the company failed to comply with CAS 405 and that the company was liable for penalties under FAR 42.709-7 for inclusion of expressly unallowable costs in incurred cost submissions. Arnold & Porter secured a precedent-setting decision that narrowly construed an "expressly unallowable cost." The ASBCA held that bonus and incentive compensation are not expressly unallowable costs under the cost principles involving advertising, organization and lobbying costs (FAR 31.205-1, -22, and -27). Although the ASBCA did not find estoppel, it did provide for resurrection of the Doctrine of Retroactive Disallowance. This was a considerable decision in an area of law that has broad implications for industry. Raytheon Co., ASBCA Nos. 57576 et al., 15-1 BCA ¶ 36043.
- Harris Corporation: We successfully represented Harris Corporation in the resolution of a government claim that the company included certain unallowable costs per the Material Management Acquisition Regulations as direct costs under a Government Publishing Office contract through bilateral negotiation. Harris Corporation v. U.S. Government Publishing Office, GAOCAB No. 2015-05.
- Triple Canopy, Inc.: We successfully represented Triple Canopy against a government claim that the company improperly included $62 million of subcontractor costs for dog handlers under the labor categories per the 2005 version of FAR 52.232-7, Time and Materials. The contractor included a Maropakis-style counterclaim asserting entitlement to $64 million pursuant to the terms of the contract and proposal. Triple Canopy, Inc. v. United States, C-291 (Fed. Cl., Jul. 29, 2015) (dismissed).
- Raytheon Company: We successfully represented Raytheon Company against a Government claim of $17M for an alleged failure to comply with a disclosed cost accounting practice. The Board ruled that the Contract Disputes Act Statute of Limitations barred the claim. The Board issued a seminal ruling outlining a number of precepts under the Statute of Limitations: The burden of proof rests with the party assert jurisdiction, not the party invoking the statute of limitations; the constructive knowledge element of claim accrual is subject to an "inherently unknowable" test; a DCAA audit report does not delay claim accrual; the government cannot avert claim accrual by insulating the Contracting Officer from knowledge; claim accrual "is not suspended simply because the government hay have been delayed in appreciating the implications of what [the contractor] had disclosed." Raytheon Missile Systems, ASBCA No. 58011, 13 BCA ¶ 35,241.
- Raytheon Company: We successfully represented Raytheon Company against a government claim alleging defective pricing under the Truth in Negotiations Act. The government rescinded its contracting officer's final decision. Raytheon Company, ASBCA No. 58012 (June 6, 2013).
- Raytheon Company: We successfully represented Raytheon Company by eliminating government clams based on allegations of noncompliance with CAS 405 and penalties for expressly unallowable costs under the Statute of Limitations. In a precedent-setting decision, the Board held that the government should have known of the basis of its claim for one fiscal year based on DCAA Audit reports stating such findings well before the six-year limitations period along with the submission of indirect cost rate proposal more than six years prior to the claim. For two other fiscal years, the Board held that the government's claim accrued upon the submission of its overhead proposals and forward pricing rate brochures. Raytheon Company, ASBCA Nos. 57576, 57679, 13 BCA ¶ 35,209.
- Raytheon Company: We successfully represented Raytheon Company by eliminating 80% of consolidated claims (wherein the government alleged entitlement to adjustments due to changes in cost accounting practices) under the statute of limitations. In a seminal decision, the Board ruled that a claim for increased costs under a change in cost accounting practice accrues upon submission of the notice of the change and a General Dollar Magnitude cost impact. The Board held that "concealed or inherently unknowable test" is interchangeable with the "knew or should have known test" and begins what the claimant "learns or reasonably should have learned" of the cause of action. The Board also held that "[c]laim accrual does not depend on the degree of detail provided, whether the contractor revises the calculations later, or whether the contractor characterized the impact as 'immaterial.'" Raytheon Company, Space & Airborne Systems, ASBCA Nos. 57801 et al., 13 BCA ¶ 35,319.
- Harris Corporation: We represented Harris in pre-and post-final decision ADR regarding an allegation of noncompliance with CAS 403. The parties successfully resolved the matter in a two-day ADR proceeding. Harris Corp., ASBCA No. 58022 (Dec. 5, 2012) (dismissed).
- Raytheon Company: We successfully represented Raytheon Company in a government claim regarding the allowability of more than $25M of Voluntary Compliance Resolution costs incurred to preserve the tax status of a defined benefit pension plan. In a seminal case, the Court of Federal Claims ruled that the Contract Disputes Act Statute of Limitations barred the Government's claim. The Court specifically held that a DCAA audit report does not postpone accrual of a government claim. Raytheon Company v. United States of America, 104 Fed. Cl. 327, recon denied, 105 Fed. Cl. 351 (2012).
- Raytheon Company: We successfully represented Raytheon Company in an appeal before the ASBCA, whereby Raytheon contested a government claim for $40.7MM (plus compound daily interest) for increased costs in the aggregate due to a change in accounting practice involving the measurement of pension costs. The ASBCA ruled in favor of Raytheon as a matter of law and denied the government's claim in full. Raytheon Company, ASBCA No. 56701, 11-1 BCA ¶ 34,735.
- Raytheon Company: We successfully represented Raytheon Company in an appeal before the ASBCA involving a government claim of noncompliance with CAS 412-50(d)(2) and (d)(4) and FAR 31.205-6(j)(1)(i) regarding funding requirements for defined applicable to certain defined benefit pension plans. The parties reach a resolution through ADR. Raytheon Company, ASBCA No. 55764 (April 2011) (dismissed).
- Global Management Systems, Inc.: We successfully converted and alleged termination for default to a termination for convenience through ADR. Global Management Systems, Inc., ASBCA No. 56761 (March 2011).