Recently, the ASBCA rejected a government claim seeking to recover costs. In that case, the government had alleged the costs were unsupported by employee time cards. But the ASCBCA reasoned the FAR prescribes a retention period for time cards. Because the government had not begun an audit until after that retention period had passed, the contractor had no obligation to retain the time cards. But now, in a decision issued shortly after the ASBCA decision, the CBCA has apparently come to the opposite conclusion.
Mission Support Alliance, LLC v. Department of Energy, CBCA 6477
Background
Mission Support Alliance (MSA) had a cost-reimbursement contract with the Department of Energy (DOE) to provide various services at the Hanford Nuclear Site in Washington. Following an audit of costs paid to MSA and its subcontractors, DOE issued a final decision seeking to recover over $15 million in unallowable costs. The parties were able to reduce the amount disputed from $15 million to $333,000 in disputed subcontractor payments. The parties submitted the remaining subcontractor dispute to the CBCA.
Analysis
Statute of Limitations
MSA claimed tha government’s claims were barred by the CDA’s six-year statute of limitations. MSA contended that its cost submissions from 2011 contained enough information to notify DOE of a potential claim. DOE, however, did not file a claim until 2019, well after the six-year deadline had passed.
The board, however, found that the grounds for disallowance were not knowable until several years after 2011, when MSA provided DOE the results of the company’s own subcontractor cost audits. MSA had failed to show how DOE would have had reason to doubt the subcontractor payments in 2011.
Employee Time Cards
A large part of the government’s claim concerned payments made to a subcontractor that were not supported by time cards. MSA alleged its subcontractor didn’t have the time cards because by the time DOE began its audit, the record retention date for the time cards had passed. MSA argued that it should not be penalized for DOE’s failure to conduct a timely audit.
The board opined that it did not intend to “penalize” MSA, but it did need to decide whether the record showed that MSA had reasonably paid its subcontractor for the labor hours at issue. The board stated understood why the time cards were not available. Nevertheless, the board opined that there needed to be something to satisfy MSA’s burden of proof. Were it otherwise, the board reasoned, the statute of limitation for a government claim would be no longer then the required retention period for time cards, With no other alternative in the record to substantiate the labor costs, the board sustained the government’s claim.
Approved Invoices
DOE sought to recover other subcontractor costs that were only supported by a single screenshot showing that an MSA representative had approved them. MSA said the costs were cool because they had been “reviewed and approved” by MSA. But the board opined that mere review and approval by a prime contractor is not enough to show that subcontractor costs are reasonable. The board also sustained this portion of the government’s claim.
MSA is represented by Marisa M. Bavand and Allison L. Murphy of Groff Murphy PLLC. The government is represented by Paul R. Davis and Andrew J. Unsicker of the Department of Energy.
