Fed. Circ. Says DOD Can’t Deny $253M Northrop Cost Claim

Law360 (November 15, 2019, 5:59 PM EST) -- The Federal Circuit ruled Friday that the Defense Contract Management Agency can't deny Northrop Grumman Corp.’s claim for $253.4 million in retiree benefit costs after the company switched cost accounting methods because Northrop more than offset the difference through a benefit contribution cap.         

Although the DCMA argued that Northrop couldn’t claim reimbursement for $253.4 million in retirement benefits as part of its accounting switch, because Northrop’s original accounting method didn’t comply with the Federal Acquisition Regulation, or FAR, that argument ignores the totality of the circumstances, a three-judge panel ruled in a precedential decision.

In isolation, that claim could be considered...

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