Microsoft Office 2010 Professional Plus Cost Accou

Background:
Suppose in January 2001 ABC Business submits a proposal, valued at $750,Microsoft Office 2010 Pro,000 concerning the FAA’s new, superior, do-everything radar (ADDER). In the previous value accounting interval, Contractor Fiscal 12 months (CFY) 2000, (ABC’s fiscal 12 months will be the exact same because the calendar year), ABC accrued $25 million of internet awards of which one exceeded $1 million.


Conclusions:
The ABC Organization is not required to submit a Disclosure Statement until the end of the first 90 days of 2001, approximately the end of March. If the FAA makes the award before March, ABC is still not required to submit the statement until the end of the 90-day interval. Conversely, if the FAA awards the contract after March, ABC must submit the statement to the FAA or its cognizant ACO at the end of the interval, regardless of whether or not the award has been made.

Background:
Martin Marietta Corporation (MMC) (now part of Lockheed Martin Corp.) within the early 1980’s had three intermediate home offices. All of its Government contracts were worked out of five segments reporting to the Aerospace headquarters (ASH) home office. Indirect expenses incurred by ASH were collected and grouped into three categories and allocated among three bases:

In 1986, MMC eliminated ASH. Some of the five segments that had reported to ASH reported directly to corporate headquarters. Others reported to a newly created intermediate home office, Information & Communications Systems Headquarters (I&CSH). The former ASH expense pools were split among the pools at corporate and among the pools at I&CSH. The method in which MMC now allocated the indirect expenses to the two home offices was the same as the method used prior to the elimination of ASH. MMC filed a price impact proposal for the accounting practice changes it had made. DCAA,Office Professional 2010 Key, however, found the impact to be immaterial, and no price adjustment was made. MMC did not include any changes within the grouping of costs in its value impact proposal.

The transfer of management functions from ASH to I&CSH resulted in increased costs on a FAA contract. While the method used was exactly the same as previously used the result was that an increased percentage of the indirect expenses were allocated to I&CSH. The FAA CO determined that the reorganization amounted to a change in accounting practice and did not allow any increased costs. MMC requested a decision from DoD because it did not consider the FAA CO to be cognizant in CAS matters. The DoD CO found that the reorganization resulted in a change to accounting practices. MMC appealed to the Armed Services Board of Contract Appeals (ASBCA).

ASBCA Decision:
The ASBCA decided in favor of MMC. The board distinguished changes between those in value and segment groupings and those in allocation methods. MMC’s reorganization was the former, and therefore, did not constitute an accounting practice change. The Government appealed to the Court of Appeals for the Federal Circuit (CAFC).

CAFC Ruling:
The court affirmed the ASBCA decision and ruled in favor of MMC. The court found that MMC had not changed its method or technique of allocating costs. It still used the "beneficial or causal relationship" test in allocating its indirect costs. Chief Judge Glenn Archer stated, "We conclude that the phrase ‘change to a price accounting practice,Microsoft Office 2010 Professional Plus,’ as used in FAR and MMC’s CAS-covered contracts, refers to changes from the proportional measurement, assignment, or allocation of costs. The Secretary’s (Secretary of Defense) contention that merely changing the size of value pools or the grouping of segments as a result of a reorganization causes a price accounting practice change that must be rejected. Organizational changes alone do not create a change in a expense accounting practice. Under the Secretary’s definition, any change to the size or composition of expense pools or grouping of segments,Office Standard 2007 Key, no matter how small, would technically be a change to a cost accounting practice requiring the contractor to submit a cost impact proposal. This definition would require a contractor to file an enormous number of proposals because, as the CASB recognized,Office 2010 Professional, there are many changes required in a ‘dynamic business environment.’ This construction is inconsistent with the CASB’s understanding that business changes of themselves are not changes in cost accounting practices." (Sec. of Defense v. Martin Marietta Corp., CAFC, No 93-1164, 2/10/95)