Alleged increased costs for changes in cost accounting practices; Statute of Limitations

Raytheon Company

Our attorneys 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.’”       

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