Summary
This document is an opinion from the Armed Services Board of Contract Appeals denying D-STAR Engineering Corp.'s motion for reconsideration of a prior decision regarding contract termination appeals. The Board evaluated whether new evidence or factual or legal errors warranted modification, specifically addressing the appellant's claims concerning a Defense Contract Audit Agency review and the interplay between Federal Acquisition Regulation cost principles and termination fairness standards. Ultimately, the Board found no compelling grounds for reconsideration, affirming that the contractor failed to meet its burden of proving the reasonableness of its costs and the certainty of its damages.
Topics
Practice areas
Questions Presented
- Whether the Board erred by not considering the DCAA “first audit” in its original decision
- Whether the Board improperly nullified FAR Part 31 cost principles and the contractor’s burden of proof by applying the fairness principle in FAR 49.201
Holdings
- The Board correctly found that the alleged “first audit” does not provide a basis for reconsideration because the DCAA concluded the settlement proposal was inadequate and non‑compliant.
- The fairness principle in FAR 49.201 does not nullify the cost‑principles in FAR Part 31 nor the contractor’s burden of proof; the contractor must still prove its costs are reasonable.
Key quotations
““FAR 49.201 does not nullify part 31’s cost principles . . . .”” (188,827-28)
Factual background
D-STAR submitted a termination settlement proposal in July 2015. The Defense Contract Audit Agency began auditing the proposal on August 21, 2015, ultimately finding it inadequate and non‑compliant. The Board considered the fairness principle in FAR 49.201 alongside the cost‑principles in FAR Part 31 when evaluating D-STAR's costs.
Procedural history
The Board previously sustained in part and denied in part D-STAR's appeals. D-STAR filed a motion for reconsideration, which the Board denied.