Government Claim for Overpayment Not Untimely Even Though Government Discovered Contractor’s Non-Existent Accounting System More than Six Years Before Final Decision; Appeal of Doubleshot, Inc. ASBCA No. 61691


Contractor’s motion for summary judgment on government’s claim is denied. The government asserted a claim against the contractor for overpayment. The contractor argued the claim was time barred. The contractor contended that the six years before the final decision asserting the overpayment, the government had discovered that the contractor had a non-existent accounting system. The contractor argued that any government claim had accrued upon discovery of the shoddy accounting system. The board rejected the contractor’s argument, reasoning that nothing about discovery of the accounting system put the government on notice of any specific costs that had been overpaid.

Doubleshot had various DoD contracts that were administered by the Defense Contract Management Agency (DCMA). In 2010, the Defense Contract Audit Agency (DCAA) conducted a site visit of Doubleshot’s offices and identified major problems with the company’s accounting system. DCAA observed that Doubleshot did not maintain a general ledger and that its accounting system was non-existent. As result of the site visit, DCMA disapproved Doubleshot’s accounting system and deobligated remaining fund due under the contracts. DCMA directed Doubleshot to invoice the government with it final incurred cost proposals for 2009 and 2010.

Over the next year and a half, Doubleshot worked to meet its contractual obligations and submitted its incurred cost proposals in 2013. DCAA then performed an audit, questioning some of Doubleshot’s direct and indirect costs. Based on the audit, the contracting officer concluded that the government had overpaid Doubleshot by $804,000. Doubleshot appealed to the ASBCA and moved for summary judgment, alleging that the government’s claim was time barred.

Under the Contract Disputes Act, a government claim against a contractor must be submitted within six years of the claim. Doubleshot claimed that the government’s claim began to run in 2010, when the DCAA discovered the company’s non-existent accounting system.

ASBCA rejected the argument noting that Doubleshot was attempting to turn what should have been an embarrassment—its lack of accounting system—into a benefit. While the record showed that the government was aware of Doubleshot’s shoddy accounting system in 2010, the record also showed that Doubleshot was able to eventually produce a incurred cost proposals in 2013 and a general ledger in 2015. Nothing in the record identified specific costs that the contracting officer knew of orshould have known about before the cost proposal and ledger were produced. Thus, the claim did not accrue when the government learned of Doubleshot’s non-existent accounting system.

Doubleshot is represented by Wayne A. Keup of Wayne A. Keup, PLLC. The government is represented by Arthur M. Taylor and Srikanti Schaffner of the Defense Contract Management Agency.

ASBCA - Doubleshot