ASBCA 57852

ARMED SERVICES BOARD OF CONTRACT APPEALS Appeal of-- ) ) Fluor Corporation ) ASBCA No. 57852 ) Under Contract No. W52P1J-07-D-0008 ) APPEARANCES FOR THE APPELLANT: Karen L. Manos, Esq. Owen E. Whitehurst, Esq. Gibson, Dunn & Crutcher, LLP Washington, DC APPEARANCES FOR THE GOVERNMENT: E. Michael Chiaparas, Esq. DCMA Chief Trial Attorney Robert L. Duecaster, Esq. Trial Attorney Defense Contract Management Agency Manassas, VA OPINION BY ADMINISTRATIVE JUDGE FREEMAN ON APPELLANT'S MOTION TO DISMISS Fluor Corporation (Fluor) appeals a contracting officer's final decision asserting a government claim for the increased costs paid by the government over seven years on Fluor's billings for its work on government contracts. The government alleges that the increased costs in the billings were caused by Fluor's cost accounting practices that were not compliant with the Cost Accounting Standards (CAS) specified by statute, regulation and contract provisions. 1 Fluor denies any CAS non-compliance, but as a preliminary matter it asserts that the government claim is barred entirely by the six-year statute of limitations in the Contract Disputes Act of 1978 (CDA), 41 U.S.C. § 7103(a)(4)(A). Since the CDA statute of limitations is jurisdictional, Fluor asserts this defense as a motion to dismiss. See McDonnell Douglas Services, Inc., ASBCA No. 56568, 10-1 BCA ~ 34,325 at 169,529. We grant the motion in part. 1 The captioned contract is representative of the contracts affected by the alleged non-compliance.  STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION 1. At all times relevant herein, Fluor has been in the business of engineering, construction, maintenance, and procurement operations around the world. Its business is predominantly commercial but, it also includes government contracts subject to CAS. (Tr. 119) The CAS provisions at issue irt the alleged non-compliance are CAS 403-40(a)(I) and CAS 403-40(b)(4). CAS 403-40(a)(I) states in pertinent part: "Home office expenses ... shall be allocated directly to segments to the maximum extent practical." CAS 403-40(b)(4) states in pertinent part: "Central payments or accruals which are made by a home office ... which cannot be identified specifically with individual segments shall be allocated to the benefitted segments using an allocation base representative ofthe factors on which the total payment is based." 48 C.F.R. § 9904.403-40 (1 Oct. 2003). 2. At all relevant times herein, Fluor's corporate office cost accounting system included a Burden & Benefits (B&B) indirect cost pool consisting of payroll taxes, health insurance, life insurance, and other employee benefits that were paid by the corporate office (tr. 1116). At all times relevant herein, the allocation base for the corporate office B&B pool was described in Fluor's Cost Accounting Standards Board (CASB) Disclosure Statements as "total office and field assigned salaried staff base compensation working time labor associated with Fluor domestic segments" (app. supp. R4, tab 1 at 46, tab 12 at 46). 3. Fluor's Salary Administration Policy effective 15 January 2001, defined "Base Compensation" as "A[n] employee's base salary plus salary adjustments, professional engineer incentive, project assignment allowances, foreign service incentives and foreign hardship allowances, shift differential, variable compensation, and TOWP (Time Off With Pay)." The Policy defined "Base Salary" as "A[n] employee's current salary excluding overtime and any temporary salary adjustments or other incentives." (Whitaker-ex. 19 at 5) 4. In August 2004, the Defense Contract Audit Agency (DCAA) audited the reasonableness of Fluor's premium pay ("uplifts") for employees based in Iraq. The cash uplifts were percentage add-ons to the employee's base salary. The largest uplifts were Hazard Pay (25%), Supplemental Hazard Pay (25%), and Foreign Assignment Pay (10%). In a message dated 20 August 2004, DCAA presented its "preliminary" conclusion to Fluor that, among other things, the total of the Fluor cash uplifts was substantially above "market" and unreasonable. (Whitaker-ex. 7) 5.