Exelis, Inc.
Docket: ASBCA 60131
Decision date: 2016-08-29

ARMED SERVICES BOARD OF CONTRACT APPEALS 
Appeal of -- ) 
) 
Exelis, Inc. ) 
) 
Under Contract Nos. N65236-07-C-5876 ) 
FA8532-12-C-0002 ) 
APPEARANCES FOR THE APPELLANT: 
APPEARANCES FOR THE GOVERNMENT: 
ASBCA No. 60131 
Steven M. Masiello, Esq. 
Joseph G. Martinez, Esq. 
Dentons US LLP 
Denver, CO 
E. Michael Chiaparas, Esq. 
DCMA Chief Trial Attorney 
Samuel W. Morris, Esq. 
Trial Attorney 
Defense Contract Management Agency 
Chantilly, VA 
OPINION BY ADMINISTRATIVE JUDGE D'ALESSANDRIS ON APPELLANT'S 
MOTION TO SUSTAIN THE APPEAL AND DISMISS THE GOVERNMENT'S CLAIM 
Appellant, Exelis Inc. (Exelis) appeals from a contracting officer's final decision 
asserting a government claim pursuant to Cost Accounting Standard (CAS) 404, pertaining to 
Exelis' purportedly noncompliant accounting for the costs of a building lease. The parties do 
not dispute that Exelis is subject to the CAS by virtue of its performing over $50 million per 
year in government contracts. See 48 C.F.R. §§ 9901.306, 9903.201. As a contractor subject 
to the CAS, Exelis is required to measure its indirect costs in accordance with the CAS and its 
disclosed cost accounting practices. One of these indirect costs is Exel is' cost of leasing 
office space that is then allocated to Exelis' government contracts. The government asserts 
that Exelis improperly accounted for the lease costs by treating the lease as an operating lease 
rather than a capital lease. According to the government, this mischaracterization of the lease 
resulted in Exelis overcharging the government for the indirect cost of the building lease in 
each of Exelis' government contracts, both flexibly-priced and fixed-price. Here, the record 
contains a cost type contract, N65236-07-C-5876 (R4, tab 2) and a firm-fixed-price contract, 
FA8532-12-C-0002 (R4, tab 13) that the government contends are representative ofExelis' 
government contracts (R4, tab 11 at 149). 
In 2007, the Defense Contract Audit 
Agency (DCAA) released its audit of Exelis' 
calendar year 2004 final indirect cost rates (R4, tab 3). In the audit report, DCAA 
questioned Exelis' lease costs, finding that the building lease was a capital lease, and that 
Exelis could only include building depreciation in its indirect cost pool rather than the 

entire lease cost (id. at 81 ). Fallowing submissions of additional information from 
Exelis, and further auditing by DCAA, in June 2015, the Defense Contract Management 
Agency (DCMA) contracting 
officer found that Exelis had improperly treated the 
building lease as an operating lease, rather than a capital lease, pursuant to Federal 
Acquisition Regulation (FAR) 31.205-11 (m) ( 1998).1 Based upon the purported FAR 
violation, DCMA determined that Exelis' accounting treatment was not in compliance 
with CAS 404, and asserted a government claim in the amount of $3,821,534 due to 
increased costs purportedly paid by the government on Exelis' contracts from 2003 
through the date of the final decision. 
Pending before the Board is Exelis' motion to sustain the appeal and to dismiss the 
government's claim for failure to state a claim upon which relief can be granted. Exelis 
asserts that the government cannot state a claim for a CAS 404 violation, even assuming 
that the government is correct that Exelis improperly accounted for the building lease. 
Next, Exelis argues that the final decision asserts a sum certain with regard to the 
purported CAS violation, but did not assert a sum certain with regard to the purported 
FAR violation, and; therefore, once the CAS claim is dismissed, the Board must dismiss 
the government's claim in its entirety for failure to assert a sum certain. The DCMA 
opposes Exelis' motion. We grant Exelis' motion in part and deny the motion in part. 
Even if the government is correct that Exelis' accounting for the building lease is in 
violation of the FAR, we hold that the government cannot establish a CAS violation. 
However, we hold that the FAR violation and the CAS violation rely upon the same 
operative facts and therefore that the government 
is asserting the "same claim" for 
purposes of the Contract Disputes Act (CDA) and deny Exelis' motion to dismiss the 
government's claim for failure to assert a sum certain. 
STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION 
1. Exelis, through a predecessor in interest, leased the Summit Park Building in 
Fort Wayne, Indiana, in 1997 (compl. ii 6, answer ii 6). 
2. Pursuant to Generally Accepted Accounting Principles (GAAP), Exelis had 
to characterize the lease as either an operating lease or a capital lease for financial 
accounting purposes. Pursuant to Statement of Financial Accounting Standards (FAS) 
No. 13, Accounting for Leases (Nov. 1976), a lease must be treated as a capital lease if 
any one of four tests is satisfied: (1) the lease transfers ownership of the property to the 
lessee by the end of the lease term; (2) the lease contains a purchase option; (3) the lease 
term is equal to 75 percent or more of the estimated economic life of the leased property; 
or (4) the present value, at the beginning of the lease, of the minimum lease payments, 
subject to certain adjustments, equals or exceeds 90 percent of the fair market value of 
the property, again subject to certain adjustments. FAS No. 13, ii 7. 
1 FAR 31.205-11 (m) has been revised and reworded and is now codified at 31.205-11 (h). 
The changes are not relevant to the resolution of this motion. 
2 

3. Exelis accumulated and reported its lease costs for the Summit Park Building 
as an operating lease (comp I. ii 8, answer ii 8). 
4. FAR 31.205-1 l(m) (1998) provides that: 
48 CFR 9904.404, Capitalization of Tangible Assets, applies 
to assets acquired by a '"capital lease" as defined in Statement 
of Financial Accounting Standard No. 13 (FAS-13), 
Accounting for Leases, issued by the Financial Accounting 
Standards Board (F ASB). Compliance with 48 CFR 9904.404 
and F AS-13 requires that such leased assets (capital leases) be 
treated as purchased assets; i.e., be capitalized and the 
capitalized value of such assets be distributed over their useful 
lives as depreciation charges, or over the leased life as 
amortization charges as appropriate. Assets whose leases are 
classified as capital leases under F AS-13 are subject to the 
requirements of 31.205-11 while assets acquired under leases 
classified as operating leases are subject to the requirements 
on rental costs in 31.205-36. The standards of financial 
accounting and reporting prescribed by F AS-13 are 
incorporated into this principle and shall govern its 
application, except as provided in subparagraphs (1 ), (2), and 
(3) below. 
( 1) Rental costs under a sale and leaseback arrangement 
shall be allowable up to the amount that would have been 
allowed had the contractor retained title to the property. 
(2) Capital leases, as defined in F AS-13, for all real 
and personal property, between any related parties are subject 
to the requirements of this subparagraph 31.205-1 l(m). If it 
is determined that the terms of the lease have been 
significantly affected by the fact that the lessee and lessor are 
related, depreciation charges shall not be allowed in excess of 
those which would have occurred if the lease contained terms 
consistent with those found in a lease between unrelated 
parties. 
(3) Assets acquired under leases that the contractor 
must capitalize under F AS-13 shall not be treated as 
purchased assets for contract purposes if the leases are 
covered by 3 l .205-36(b )-( 4 ). 
3 

5. CAS 404 Capitalization of Tangible Assets, provides: 
This Standard requires that, for purposes of cost 
measurement, contractors establish and adhere to policies 
with respect to capitalization of tangible assets which satisfy 
criteria set forth herein. Normally, cost measurements are 
based on the concept of enterprise continuity; this concept 
implies that major asset acquisitions will be capitalized, so 
that the cost applicable to current and future accounting 
periods can be allocated to cost objectives of those periods. 
A capitalization policy in accordance with this Standard will 
facilitate measurement of costs consistently over time. 
48 C.F .R. § 9904.404-20. CAS 404 further defines the term "tangible capital asset" 
as "an asset that has physical substance, more than minimal value, and is expected to 
be held by an enterprise for continued use or possession beyond the current 
accounting period for the service it yields." 48 C.F.R. § 9904.404-30(a)(4). 
6. Preamble A to CAS 404 provides in part: 
(7) Accounting for assets acquired by lease. Many 
commentators suggested to the Board various methods of 
accounting for assets acquired by lease. This problem is not a 
new one. Tangible assets can be acquired by various kinds of 
business transactions and relationships. The accounting 
principles related to capitalization are most readily applied in 
connection with purchases. Some lease agreements provide 
to the user of an asset many of the attributes of ownership. 
The accounting profession has long been cognizant of 
difficulties related to determining when assets acquired by 
lease should be treated as purchases. 
The Board agrees that assets actually purchased should 
(if otherwise appropriate for capitalization) be capitalized 
even when the purchase transaction is in the form of a lease 
agreement. 
This same determination must be made for other 
accounting purposes. The accounting profession is now 
guided, in this regard, primarily by opinions of the Accounting 
Principles Board; it is our understanding that the Financial 
Accounting Standards Board will soon undertake to provide a 
new statement for the profession on this issue. This Board 
will carefully consider all authoritative statements of 
accounting principles to the extent that it can do so while 
4 

maintaining progress toward its own primary goal of increased 
uniformity and consistency in cost accounting for contracts. 
Those lease acquisitions which are treated as purchases 
will be subject to this standard; those which are treated as 
leases will for the time being be subject to the existing 
procurement regulations which deal with rental costs. The 
Board is, therefore, willing that the contractor determine, for 
each acquisition, whether it is a purchase and hence subject to 
this capitalization policy (which must comply with the criteria 
established in this Standard) or 
a rental transaction and hence 
subject to established regulations on rental costs. In either 
case, determination of the reasonableness of the lease costs 
remains the responsibility of the procurement agencies and is 
not dealt with here by the Cost Accounting Standards Board. 
Cost Accounting Standards Guide, Regulation, Cost Accounting Standards Board, 
Preamble A, 38 Fed. Reg. 5318-19 (Feb. 27, 1973). 
7. In a final decision dated 3 June 2015, the DCMA divisional administrative 
contracting officer, Lisa Lunceford, asserted a government claim for $3,821,534 against 
Exelis (R4, tab 11 ). The final decision found that Exelis improperly accounted for the 
Summit Park Building lease as an operating lease when it should have been treated as a 
capital lease because the present value of the lease payments, at the inception of the lease, 
was greater than 90 percent of the fair market value of the building. The final decision 
determined that Exelis was non-compliant with CAS 404 and FAR 31.205-11 (h). The 
final decision determined that, due to the finding of CAS non-compliance, the government 
paid increased costs of$3,015,813 from calendar year 2003 through the date of the final 
decision, and that the government was entitled to $805, 721.34 in compound interest. The 
final decision attributed $2,586,354 of the $3,015,813 in increased costs to Exelis' 
firm-fixed-price contracts. (Id.) 
8. Exelis timely appealed to the Board from the final decision. 
DECISION 
I. Standard of Review 
The Board will grant a motion to dismiss for failure to state a claim when the complaint 
fails to allege facts '"plausibly suggesting (not merely consistent with)' a showing of 
entitlement to relief." Cary v. United States, 552 F.3d 1373, 1376 (Fed. Cir. 2009) 
(quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 557 (2007)); American General 
Trading & Contracting WLL, ASBCA No. 56758, 12-1 BCA i134,905 at 171,640. The 
allegation "must be enough to raise a right to relief above the speculative level." Cary, 
552 F.3d at 1376. In addition, the "complaint must contain sufficient factual matter, 
5 

accepted as true, to 'state a claim to relief that is plausible on its face."' Ashcroft v. Iqbal, 
556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). 
II. The Final Decision does Not Assert a CAS Violation upon which Relief may be 
Granted 
Exelis asks the Board to sustain its appeal and dismiss the government's claim for 
failure to state a claim upon which relief may be granted. According to Exelis, even 
assuming all facts in favor of the government, at most the government could establish 
that Exelis was non-complaint with the FAR, and cannot state a claim for a CAS 
violation. Exelis asserts that CAS 404, by its terms applies only to "tangible capital 
assets" and does not apply to a lease because a lease is an intangible asset. Exelis 
additionally argues that the regulatory history of CAS 404 demonstrates that it does not 
apply to a contractor's characterization oflease, and that, at most, the mischaracterization 
of a capital lease as an operating lease would create a FAR allowability issue. The 
government, in opposing Exelis' motion, argues that, properly interpreted, CAS 404 
applies to Exelis' lease. 
A. The Plain Language of CAS 404 
Interpretation of the CAS is an issue of law. Rumsfeld v. United Technologies 
Corp., 315 F.3d 1361, 1369 (Fed. Cir. 2003). We interpret regulations, such as the 
CAS, the same way statutes are interpreted. See, e.g., General Dynamics Corp., ASBCA 
No. 31359, 92-1BCAif24,698 at 123,255. By its terms, CAS 404 applies to "Tangible 
Assets" (SOF if 5). The CAS defines "tangible capital asset[s]" as "asset[s] that [have] 
physical substance, more than minimal value, and [are] expected to be held by an 
enterprise for continued use or possession beyond the current accounting period for the 
services it yields" (id.). Thus, the plain language of the CAS provides that CAS 404 
applies to tangible assets which are assets with physical substance. A lease is an 
"intangible" rather than a tangible asset because the lease itself is a legal right to use and 
occupy the building and does not have "physical substance." See, e.g., Richard S. Miller 
& Sons, Inc. v. United States, 210 Ct. Cl. 431, 450 (1976) (defining goodwill as the 
aggregate of intangible assets of a business, including leases). This interpretation is 
consistent with FAS 141 which provides that leases are "contract based intangible 
assets." Statement of Financial Accounting Standards No. 141, Business Combinations 
if A.14(d) (June 2001); Statement of Financial Accounting Standards No. 141, Revised 
2007, Business Combinations if A.46(c) (Dec. 2007). In interpreting the CAS, 
accounting terms are construed consistent with accounting standards. See, e.g., BAE Sys. 
Information & Electronic Systems Integration, Inc., ASBCA No. 44832, 01-2 BCA 
if 31,495 at 155,523 (interpreting "purchase method of accounting" and "business 
6 

combinations" consistent with Accounting Principles Bulletin Number 16 because they 
are "terms of art" or "technical terms"). 
The government argues unconvincingly that the plain 
language of CAS 404 
supports requiring 
Exelis to treat the Summit Park Building lease as a capital lease. 
According to 
the government, permitting Exelis to treat the building lease as an operating 
lease would be contrary to the purpose of CAS 404 and the fundamental requirements of 
CAS 404-40. The government asserts that the purpose of CAS 404 is that "major asset 
acquisitions will be capitalized" (gov't opp'n at 3 (quoting CAS 404-20)), and that the 
"Fundamental requirement" provision of the standard provides that "[t]he acquisition cost 
of tangible capital assets shall be capitalized" (id. (quoting CAS 404-40(a))). The 
government asserts that the building has "physical substance," is of more than minimal 
value, and is expected to be held for "continued use" and thus, the lease is subject to 
CAS 404 so long as the lease is an acquisition 
(id.). The government then interprets the 
word "acquisition" 
in isolation in an attempt to demonstrate that Exelis acquired the 
Summit Park Building by means of the lease (id. at 3-4). 
We interpret CAS 404 based upon its plain language. See, e.g., Johns-Manville 
Corp. v. United States, 855 F.2d 1556, 1559 (Fed. Cir. 1988). In addition, we read the 
regulation as a whole, attempting to "fit, if possible, all parts into an harmonious whole." 
Nielson v. Shinseki, 607 F.3d 802, 807 (Fed. Cir. 2010) (quoting FTC v. Mandel Brothers, 
Inc., 359 U.S. 385, 389 (1959)). Here, the government's interpretation of individual words 
in isolation would create a nonsensical interpretation of the regulation as a whole. As 
noted above, the lease itself is an intangible asset and itself does not have "physical 
substance." Richard S. Miller, 210 Ct. Cl. at 450. The building has "physical substance" 
but Exelis has not acquired the building, it has an intangible right to use and 
occupy the 
building. Moreover, the government's proposed interpretation does not recognize a 
distinction between capital leases and operating leases. Thus, ifthe government's 
interpretation were correct, contractors would need to capitalize all long-term leases, 
including not only building leases, but also leases of vehicles, and equipment. 
B. The Preamble To CAS 404 
Because the plain language of CAS 404 is clear, we do not need to look to the 
legislative history of the standard. See, e.g., Snyder v. Nicholson, 489 F.3d 1213, 1217 
(Fed. Cir. 2007). However, we note that the preamble to CAS 404 provides that the CAS 
Board is "willing that 
the contractor determine, for each acquisition, whether it is a 
purchase and hence subject to this capitalization policy (which must comply with the 
criteria established in this Standard) or a rental transaction and hence subject to established 
regulations on rental costs" (SOF ~ 6). The CAS Board's interpretation, as stated in the 
preamble, is entitled to deference. Perry v. Martin Marietta Corp., 47 F.3d 1134, 1138 
(Fed. Cir. 1995). Thus, even if the language of CAS 404 were not clear, the appropriate 
interpretative aid, the preamble, confirms that the CAS Board intended 
to allow the 
contractor to determine whether a lease should be treated as a capital lease or an operating 
7 

lease, and that CAS 404 would only apply in the event that the contractor elected to treat 
the lease as a capital lease. Thus, the CAS Board clearly did not intend that all leases be 
considered "tangible capital assets." 
C. Other Interpretative Aids 
The government asserts that the proper interpretation of CAS 404 is found in the 
1992 "Statement of Objective, Policies and Concepts." According to the government, the 
statement provides that "uniformity" and "consistency" are primary objectives of the 
CAS Board. (Gov't opp'n at 5-6) We first note that the 1992 statement was issued by a 
different CAS Board than the CAS Board that issued 
CAS 404.2 The statement of intent 
of the new CAS Board is not conclusive of the intent of the old CAS Board. See General 
Motors Corp. v. United States, 78 Fed. Cl. 336, 347 (2007). However, the original CAS 
Board issued its own "Restatement of Objectives, Policies and Concepts" in May 1977. 
Reprinted in Cost Accounting Standards Guide (CCH) ii 2915 ( 1998). The wording of 
the two policy statements differ slightly, but the difference is not material for the purpose 
of resolving this motion. 
The specific language in the preamble to CAS 404, providing that the CAS Board 
is "willing that the contractor determine, for each acquisition, whether it is a purchase 
and hence subject to this capitalization policy (which must comply with the criteria 
established in this Standard) or a rental transaction and hence subject to established 
regulations on rental costs" (SOF ii 6), is more useful in interpreting the standard than the 
government's citation to general policies of uniformity and consistence. Significantly, 
the preamble to CAS 404 recognized its primary "goal of increased uniformity and 
consistency in cost accounting for contracts," immediately before stating that "[t]hose 
lease acquisitions which are treated as purchases will be subject to this standard; those 
which are treated as leases will for the time being be subject to the existing procurement 
regulations which deal with rental costs." Thus the CAS Board recognized that 
uniformity and consistency could be addressed through the standard, but elected not to do 
so, stating that "determination of the reasonableness of the lease costs remains the 
responsibility of the procurement agencies and is not dealt with here by the Cost 
Accounting Standards Board." (SOF ii 6) 
The government additionally argues that Exelis misinterprets the preamble to CAS 
404, and that the preamble actually stands for the proposition that the contractor must 
2 The original CAS Board was established in 1970 as an agency of Congress. Defense 
Production Act-Amendments_- Economic Stabilization, Pub. L. No. 91-379, 
1970 U.S.C.C.A.N. (84 Stat.) 937. After the original CAS Board went out of 
existence in 1980, a new CAS Board was established in 1988 as an Executive 
Branch agency in the Office of Management and Budget. Office of Federal 
Procurement Policy Act Amendments of 1988, Pub. L. No. 100-679, 1988 
U.S.C.C.A.N. (102 Stat.) 4055. 
8 

account for leases in the same manner as the assets would be accounted for pursuant to 
financial accounting under GAAP (gov't opp'n at 6-8). The government also asserts 
that its interpretation is supported by the hierarchy for interpretation of CAS standards 
(id. at 10) because it is using the GAAP to fill-in a gap where the CAS is silent. Once 
again, we note that the plain language of the CAS is clear, and that it is not necessary to 
fill-in any gaps. However, to the extent there is a gap, the government incorrectly 
attempts to use a GAAP provision to control the CAS when the hierarchy for 
interpretation of CAS standards provides that the CAS controls. 
As the government notes in its opposition, there is a recognized hierarchy for 
interpretation of CAS provisions which places the CAS Board's standards, rules, and 
regulations at the top, followed by the FAR and agency FAR supplements, and then 
GAAP. United Technologies, 315 F.3d at 1373. Here the CAS with its rules and 
regulations, including the contemporaneous preamble, provides that the contractor can 
select whether to treat the lease as a capital lease or an operating lease. These sources are 
at the top of the hierarchy. The government seeks to use GAAP, the lowest level of the 
hierarchy, to interpret the top level of the hierarchy because of a purported "gap." 
This CAS hierarchy means that the CAS concerns the measurement, assignment, 
and allocation of costs. However, the FAR, and not the CAS, determines the allowability 
of the costs. Thus, the fact that an accounting practice is CAS-compliant does not mean 
that the costs are allowable pursuant to the FAR and the fact that costs are unallowable 
does not mean that an accounting practice violates the CAS. If a contractor improperly 
accounts for a capital lease as an operating lease, this creates an allowability problem, in 
violation of the FAR, and not a CAS problem. "The rule is that any capital lease costs in 
excess of the prescribed depreciation charges are unallowable." DARRELL J. OYER, 
ACCOUNTING FOR GOVERNMENT CONTRACTS--COST ACCOUNTING STANDARDS 13-21 
(Matthew Bender ed., 2009). In sum, even if we were to consider legislative histories or 
other interpretative aids in construing CAS 404, it would not change our determination 
that the government cannot establish a CAS 404 violation. 
III. The Government's Claim for Violation of the FAR 
Having determined that the final decision fails to state a CAS claim upon which 
relief may be granted, we turn to Exelis' request that the appeal be sustained in its 
entirety because the government failed to assert a sum certain in the final decision for a 
potential FAR violation. We deny this part of Exelis' motion because we find that the 
government could assert facts sufficient to establish entitlement to relief because the FAR 
claim is based upon the same facts as the CAS claim and thus constitutes the same claim 
for CDA purposes. We note that Exelis filed a motion to dismiss, and not a motion for 
summary judgment, and neither party has supported their briefs with declarations or 
additional documentation. 
9 

The Board has recognized that "[ n ]ew theories or new damages arising from 
the same operative facts are not new 
claims." Conte! Advanced Systems, Inc., 
ASBCA No. 50648 et al., 03-2 BCA ii 32,277 at 159,696. Moreover, "[t]he test for what 
constitutes a 'new' claim is whether 'claims are based on a common or related set of 
operative facts."' Unconventional Concepts, Inc., ASBCA No. 56065 et al., 10-1 BCA 
ii 34,340 at 169,591 (quoting Placeway Construction Corp. v. United States, 920 F.2d 
903, 907 (Fed. Cir. 1990)). Here, the final decision asserted that Exelis violated 
FAR 31.205-11 (h) and that the FAR violation constituted a violation of CAS 404. The 
relevant facts to determining either the FAR or the CAS claim include the terms of the 
lease for the Summit Park 
Building, Exelis' cost of borrowing, and the market value of 
the building. Thus, the FAR and the CAS claims involve the same operative facts and are 
the same claim for CDA purposes. 
Exelis asserts that the Board lacks jurisdiction because the final decision asserts a 
sum certain calculated based on a CAS violation, and did not assert a separate sum certain 
based upon a FAR violation. Unlike a CAS 404 violation, disallowed costs pursuant to a 
FAR violation would not entitle the government to an adjustment of fixed-price contracts. 
Compare 48 C.F.R. § 9903.306(b) (providing for the calculation of increased costs on 
fixed-price contracts for CAS violations) with FAR 16.202-1 (firm-fixed-price contracts 
are not adjustable based on contractor's cost experience). Exelis asserts, and the 
government admits, that $2,586,354 of the $3,015,813 in claimed increased costs pertain 
to fixed-price contracts (SOF ii 7; compl. ii 49, answer ii 49). Thus, the sum certain 
involved in a FAR violation likely would be smaller than with a CAS violation. 
The sum certain requirement simply requires that a contractor, or the government in 
the case of a government claim, specify a dollar amount for the claim. "The Board 
has repeatedly held that use of estimated or approximate costs in determining the value of a 
claim is permissible so long as the total overall demand is for a sum certain." Government 
Services Corp., ASBCA No. 60367, 16-1BCAii36,411at177,537. The lack ofa sum 
certain deprives the contracting officer, or in this case the contractor, of the opportunity of 
meaningful consideration of the claim. Eaton Contract Services, Inc., ASBCA No. 52888 
et al., 02-2 BCA ii 32,023 at 158,267 (citing Metric Constr. Co. v. United States, 14 Cl. Ct. 
177, 179 ( 1988) ). Additionally, it is well recognized that a claim can be amended to 
increase the asserted claim amount without requiring a new claim. See, e.g., Tecom, Inc. v. 
United States, 732 F.2d 935, 937-38 (Fed. Cir. 1984). Thus, the fact that the government's 
sum certain was apparently calculated based on a purported CAS violation, rather than on 
the basis of a purported FAR violation, does not render the claim improper because the 
purported CAS and FAR violations are the same claim for CDA purposes. Moreover, it 
would make little sense to permit a claim to be increased without requiring submission of a 
new claim, but to create a new rule requiring a new final decision in the event that the 
amount in dispute decreases. Because we hold that the final decision satisfies the sum 
certain requirement, we do not reach the government's alternative argument that the final 
decision is an interpretation of a contract term. 
10 

CONCLUSION 
For the reasons stated above, we grant Exelis' motion in part, holding that the 
government fails to state a claim upon which relief may be granted regarding a purported 
violation of CAS 404, but deny Exelis' motion to sustain the appeal in its entirety because 
we find that the final decision states a sum certain with regard to a FAR violation. 
Dated: 29 August 2016 
I concur 
Administrative Judge 
Acting Chairman 
Armed Services Board 
of Contract Appeals 
DA YID D' ALESSANDRIS 
Administrative Judge 
Armed Services Board 
of Contract Appeals 
I concur 
RICHARD SHACKLEFORD 
Administrative 
Judge 
Vice Chairman 
Armed Services Board 
of Contract Appeals 
I certify that the foregoing is a true copy of the Opinion and Decision of the 
Armed Services Board of Contract Appeals in ASBCA No. 60131, Appeal of Exelis, Inc., 
rendered in conformance with the Board's Charter. 
Dated: 
11 
JEFFREY D. GARDIN 
Recorder, Armed Services 
Board of Contract Appeals