Tuesday, September 23, 2014

You Go First. No, You Go First.

Last December, a DCMA (Defense Contract Management Agency) contracting officer (CO) issued a final decision to Beechcraft Defense Company (BDC) alleging that BDC was noncompliant with CAS (Cost Accounting Standard) 402 from 2006 to present. The final decision asserted a government claim for $5.9 million, including interest.

In February of this year, BDC appealed the final decision to the ASBCA (Armed Services Board of Contract Appeals). Subsequently, BDC filed a motion arguing that since the appeal involved a Government claim, the Government was in a better position to file the complaint and that the proceeding would be facilitated by the Government's filing of the initial pleading setting forth the full rationale for the assertion of its claim.

The Government responded that while it recognized the appeal involved a Government claim, the appellant, BDC, was in the best position to assert the facts that would establish a compliant accounting practice.

BDC did not agree with the Government. BDC stated:
Directing the Government to file the complaint would facilitate these proceedings because it would establish the factual and legal allegations underlying the Government's position from the outset, rather than having Beechcraft draft a complaint that speculates about the grounds for the Government's claim, and which may include information that is not relevant to the dispute.
When it comes to CAS Noncompliance, the Burden of Proving Noncompliance is upon the Government.

The ASBCA agreed with BDC. The Board stated that the Government's response evidences a basic misunderstanding concerning the alleged CAS violations. "It appears the government believes that it is appellant's burden to establish that its accounting system is CAS compliant. The law is otherwise. The burden of proving noncompliance is upon the government".

In its decision, the Board ruled as follows:
In the circumstances of this appeal, we conclude that the proceedings would be facilitated by the government setting forth in an initial pleading, the facts and rationale for its CO's decision finding that Beechcraft was noncompliant with CAS 402 and the position the government is taking before this Board. We do not deem this requirement to be onerous. The government should be fully conversant with its own claim.

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