L3 Technologies, Inc.
Docket: ASBCA 61811, ASBCA 61813, ASBCA 61814
Decision date: 2021-03-01

ARMED SERVICES BOARD OF CONTRACT APPEALS 
 
Appeals of - )  
 )  
L3 Technologies, Inc. ) ASBCA Nos.  61811, 61813, 61814 
 )   
Under Contract Nos. FA8620-06-G-4002 et al.                                     ) 
 
 
APPEARANCES FOR THE APPELLANT: Karen L. Manos, Esq.  
Erin N. Rankin, Esq. 
Justin P. Accomando, Esq.  
    Gibson, Dunn & Crutcher LLP 
  Washington, DC  
     
APPEARANCES FOR THE GOVERNMENT: Arthur M. Taylor, Esq. 
    DCMA Chief Trial Attorney 
 Amelia R. Lister-Sobotkin, Esq. 
    Trial Attorney 
    Defense Contract Management Agency 
    Chantilly, VA 
 
MAJORITY1 OPINION BY ADMINISTRATIVE JUDGE PROUTY 
 
These three appeals, submitted by appellant, L3 Technologies, Inc. (L3), involve 
government claims challenging both indirect and direct costs paid to L3 on several 
government contracts for certain years.  As the litigation progressed, the government 
apparently thought better of its claims and withdrew them in toto and represented it 
would make no further claims on the contract years in question.  Consequently, the 
government has moved for dismissal of these appeals on mootness grounds.  L3 opposes, 
seeking either summary judgment in its favor or that we deny the motion to dismiss and 
keep the appeals live so that it can obtain a victory that, it believes, would preclude its 
suffering similar government claims in other contract years.  On the facts before us, 
we grant the government’s motion and dismiss these appeals as moot.  L3’s motion for 
summary judgment is denied. 
  
                                              
1 These appeals were originally considered by a five-judge division of the Board, 
including Judge Kinner, who passed away while the matter was still under 
deliberation.  Because three of the remaining four judges concurred in this 
opinion, there was no need to appoint a fifth judge to the division.  Under the 
Board’s internal rules, this decision is precedential. 

2 
STATEMENT OF FACTS FOR PURPOSES OF THE MOTION 
 
For the purposes of deciding the motions before us, we need not delve too deeply 
into the merits of the underlying appeals, but need to understand their scope and the 
limits of what they may accomplish. 
 
I. What the Appeals are About 
 
The first of these appeals, No. 61811, challenges a Contracting Officer’s Final 
Decision (COFD) dated June 28, 2018, seeking repayment of $10,692,605 by L3 for 
certain “other direct costs” and overhead that had been included in L3’s final indirect 
cost rate proposals2 for the fiscal years 2011, 2012, 2013, and 2014.  See compl. ¶ 8.3  
The COFD followed a group of audit reports (one for each contract year)4 by the Defense 
Contract Audit Agency (DCAA), all issued on September 27, 2017, questioning 
$14,337,524 of these already-paid costs (id. ¶ 9).  These audit reports all utilized some 
degree of statistical sampling of particular costs (e.g., individual instances of premium air 
travel that the auditor felt were not justified), with results extrapolated across the board 
for that cost (id. ¶¶ 12, 15, 20, 22; app. opp’n at 7-8, 10-115). 
 
Appeal No. 61813 is an appeal of a far more modest government claim.  There, the 
June 29, 2018 COFD demanded the payment of $6,002 based upon a February 14, 2018 
DCAA audit report that questioned the use of premium airfare for two L3 employees for 
the years 2012-2015 (see R4, tab 4 at G000274, G000344-49). 
 
And Appeal No. 61814 is another, even smaller, government claim, resting upon a 
different COFD, though also issued on June 29, 2018, seeking $2,542 in premium airfare 
incurred by an L3 employee in 2011.  It rested upon the same February 14, 2018 DCAA 
audit report that informed the COFD in Appeal No. 61813 (see R4, tab 4 at G000274, 
G000352-58). 
 
                                              
2 For an explanation of how indirect cost rate proposals work, we refer the reader to 
Tech. Sys., Inc., ASBCA No. 59577, 17-1 BCA ¶ 36,631. 
3 The only appeal for which a complaint was submitted (and it was submitted by the 
government) is Appeal No. 61811. 
4 These were numbered 9511-2011G10100001, 9511-2012G10100001, 9511-
2013G10100001, and 9511-2014G10100002 (compl. ¶ 9). 
5 With the exception of its objection to certain language it deemed inflammatory and some 
characterizations of the evidence, the government agrees with the facts presented in 
L3’s brief in opposition to its motion to dismiss.  See gov’t reply at 2-3.  Thus, 
much of the procedural history that we set forth here comes from L3’s brief since 
both parties agree that it is accurate. 

3 
II. The Present Litigation and the Government’s Unequivocal Withdrawal of its 
COFDs 
 
These three appeals (all submitted to the Board the same day) were immediately 
consolidated.  L3 then requested that the Board order the government to file the 
complaint in Appeal No. 61811, which we directed and the government accomplished.6  
The government’s complaint in Appeal No. 61811 seeks no declaratory or injunctive 
relief, but merely explains the basis of its claim and demands payment consistent with the 
COFD for the years covered by it.  See compl.  Discovery followed. 
 
Ultimately, as admitted in a February 28, 2020 email from government counsel to 
L3’s attorney, the government decided that it could not defend these appeals.  See app. 
opp’n, ex. 2.  Thus, in a letter to L3’s Chief Financial Officer dated February 28, 2020, 
the cognizant administrative contracting officer wrote:   
 
I hereby unequivocally withdraw the Contracting Officer’s 
Final Decisions (“COFDs”) and demands for payment dated 
28 June 2018 (ASBCA No. 61811), signed by Gladys Broyles, 
29 June 2018 (ASBCA No. 60813) signed by Cheryl L. Clark, 
and 29 June 2018 (ASBCA No. 60814), signed by 
Jennings L. Summers that have been appealed to the ASBCA 
and assigned the respective docket numbers.  A motion for 
dismissal of those appeals will be filed by the assigned trial 
attorney.  The Government does not intend to re-assert the 
costs at issue in those disputes. 
 
(Gov’t mot., ex. 1)  L3 makes no assertion that these COFDs may be re-imposed nor 
that the government will re-assert its challenge to the costs at issue in those disputes.  
We find, as a matter of fact, that the withdrawal of these claims is unequivocal. 
 
III. Other Litigation Involving L3’s Contracts and DCAA Audits 
 
As we will explain more below (and as noted in Judge Clarke’s dissent), L3 
opposes the government’s request to dismiss these appeals because it contends it has been 
here before.  Many times.  And without resolution.  The dissenting opinion discusses this 
at length and, although we come to a different conclusion regarding the legal 
consequences, we agree that L3 has been to the Board quite often in recent years as a 
consequence of COFDs stemming from incurred cost audits and that none of these 
                                              
6 The government opposed L3’s motion to require it to file a complaint, stating in its 
November 9, 2018 opposition, inter alia, that, L3 “is fully aware of the issues in 
these appeals . . . .  The disallowances are the results of an ongoing dispute that 
has existed for several years and which is the subject of several other disputes 
before the Board.”  See app. opp’n at 12. 

4 
appeals has led to a decision on the merits.7  This happened for appeals of audits of years 
2006, 2007, 2008, 2009, and 2010.  (App. opp’n at 4-10)  Moreover, some of these prior 
appeals involved audits which utilized statistical sampling as in the audit that is the basis 
of Appeal No. 61811.  See, e.g., app. opp’n at 6-7 (referring to the use of decrement for 
audit of 2009 direct costs).  Appeal Nos. 62123, 62267, and 62268, brought by L3 
challenging the disallowance of other incurred costs by the government resting in part on 
similar statistical extrapolation, remain pending before the Board, but stayed pending the 
outcome of the present appeals.  (App. opp’n 13-14) 
 
DECISION 
 
As will be discussed below, the government’s withdrawal of the COFDs moots 
these appeals, which are premised upon them since there is simply no additional, legally 
cognizable relief that this Board can afford L3.  Moreover, neither exception to the 
mootness doctrine asserted by L3 – voluntary cessation and capable of repetition yet 
evading review – is applicable here. 
 
I. The Mootness Doctrine:  Generally, a Case is Moot When an Adjudicatory 
Body May No Longer Provide Relief. 
 
In the past, we have had no compunction against dismissing, as moot, appeals in 
cases analogous to this one, where the CO has withdrawn COFDs asserting government 
claims on incurred costs.  In Combat Support Associates, ASBCA Nos. 58945, 58946, 
16-1 BCA ¶ 36,288, a case involving incurred cost audits and government claims 
disallowing costs already paid, we dismissed the appeal on government motion after the 
government claims were withdrawn, writing:   
 
Where a contracting officer unequivocally rescinds a 
government claim and the final decision asserting that claim, 
with no evidence that the action was taken in bad faith, there is 
no longer any claim before the Board to adjudicate, and the 
appeal is dismissed.  KAMP Systems, Inc., ASBCA No. 54253, 
09-2 BCA ¶ 34,196 at 168,995.  In such circumstances, the 
government’s voluntary action moots the appeal, cf. Teddy’s 
Cool Treats, ASBCA No. 58384, 14-1 BCA ¶ 35,601 
at 174,410 (dismissing appeal as moot where government 
changed default termination to a notice termination), leaving 
the Board without jurisdiction to entertain the appeal further.  
                                              
7 In a significant number of these appeals, however, the matters were settled with the 
consent of L3 and not over its objections.  See app. opp’n at 4 (appeal of COFD 
for 2006 costs settled by parties shortly before hearing), app. opp’n at 5 (appeal of 
COFDs for 2007 costs settled by parties), app. opp’n at 7 (appeal of COFDs for 
some 2009 costs settled by parties), app. opp’n at 9-10 (appeal of COFDs for other 
2009 costs and 2010 costs settled by parties). 

5 
See Lasmer Indus., Inc., ASBCA No. 56411, 10-2 BCA 
¶ 34,491 at 170,123. 
 
16-1 BCA ¶ 36,288 at 176,974; see also Advanced Powder Solutions, ASBCA No. 61818, 
19-1 BCA ¶ 37,425, aff’d 831 Fed. Appx. 501 (Fed. Cir. 2020) (dismissing appeal 
because, without claim, the Board had no jurisdiction). 
 
We ruled similarly in Quimba Software, Inc., ASBCA No. 59197, 19-1 BCA 
¶ 37,350, rejecting Quimba’s complaints that the government had wrongfully compelled 
it to expend resources defending against a claim that had no basis, (allegedly) being 
brought after the expiration of the statute of limitations.  See Quimba Software, 19-1 
BCA at 181,613.  Indeed, L3, itself, had a previous set of its appeals of government 
incurred cost claims dismissed over its objection upon the government’s withdrawal of 
the COFD’s in question.8  See L-3 Communications Integrated Sys., L.P., ASBCA 
Nos. 60431, 60432, 16-1 BCA ¶ 36,362. 
 
The basis for such mootness dismissals is the constitutional requirement for a case 
or controversy.9  “Simply stated, a case is moot when the issues presented are no longer 
‘live’ or the parties lack a legally cognizable interest in the outcome.”  Powell v. 
McCormack, 395 U.S. 486, 496 (1969).  As the Federal Circuit summarized in Ferring 
B.V. v. Watson Labs., Inc.-Fla., 764 F.3d 1382 (Fed. Cir. 2014), “[a] case becomes moot 
when interim relief or events have eradicated the effects of a defendant’s act or omission, 
and there is no reasonable expectation that the alleged violation will recur.”  764 F.3d 
at 1391 (citing County of Los Angeles v. Davis, 440 U.S. 625, 631 (1979)); see also 
Chapman Law Firm Co. v. Greenleaf Constr. Co., 490 F.3d 934, 939 (Fed. Cir. 2007) 
(“When, during the course of litigation, it develops that the relief sought has been granted 
or that the questions originally in controversy between the parties are no longer at issue, 
the case should generally be dismissed.”). 
 
It should be clear that this “legally cognizable interest” in the outcome is tied not 
merely to the conduct being challenged by the lawsuit, but the relief or remedy available 
through continued litigation.  The Supreme Court recognized this in Powell v. 
McCormack when discussing one of its earlier opinions holding a matter moot:  “[The 
earlier case] stands . . . for the proposition that, where one claim has become moot and 
the pleadings are insufficient to determine whether the plaintiff is entitled to another 
remedy, the action should be dismissed as moot.”  395 U.S. at 499.  Put another way, 
even if a litigant remains harmed by the actions of the other party after that party has 
                                              
8 This was one of the sets of appeals of which L3 complains above. 
9 L3 argues that, to the extent that these decisions rested upon the notion that withdrawal 
of the COFD’s divested the Board of jurisdiction by the fact that there was no 
longer a COFD to appeal, they were contrary to Board precedent holding that 
withdrawal of COFDs does not divest the Board of jurisdiction.  See app. opp’n 
at 26-30.  We rest our opinion here upon the mootness doctrine, which is centered 
upon the case-or-controversy requirement, not the lack of a COFD to appeal. 

6 
changed its behavior to remove the basis of the pending suit, if the court is no longer able 
to provide a remedy to that remaining harm, the case is moot.  As the Supreme Court 
noted in Spencer v. Kemna, a case remains viable only if “throughout the litigation, 
the plaintiff ‘must have suffered, or be threatened with, an actual injury traceable to the 
defendant and likely to be redressed by a favorable judicial decision.’”  523 U.S. 1, 7 
(1998) (quoting Lewis v. Cont’l Bank Corp., 494 U.S. 472, 477 (1990)).  The 
implications of this straightforward explanation of the law, it will be seen, are significant. 
 
II. On Their Faces, These Appeals Are Moot 
 
Simply speaking, the COFDs appealed here no longer exist – they have been 
withdrawn.  Moreover, the government has unequivocally stated that it will never again 
challenge the incurred price proposals for the contract years at issue.  Therefore, 
seemingly, there is no relief we may grant and the appeals should be dismissed.  This is 
very much like the circumstances we saw in Combat Support Associates, Quimba, and 
the previous 2016 L3 decision.  Thus, if there weren’t more to it, we could comfortably 
grant the government’s motion based upon our precedent. 
 
III. The Voluntary Cessation Doctrine Is Inapplicable Here Because The Harm 
Being Appealed Is Unlikely To Recur 
 
But there is somewhat more to it:  L3 argues that the two exceptions to the 
mootness doctrine preclude dismissal.  The first of these, “voluntary cessation,” is where 
L3 makes its primary argument.  See app. opp’n at 21-32.  L3 quotes the Supreme Court 
as holding that, “[i]t is well settled that ‘a defendant’s voluntary cessation of a challenged 
practice does not deprive a federal court of its power to determine the legality of the 
practice.’  ‘[I]f it did, the courts would be compelled to leave “[t]he defendant … free to 
return to his old ways.’”  (App. opp’n at 18; citing to Friends of the Earth, Inc. v. 
Laidlaw Envtl. Servs., Inc., 528 U.S. 167, 189 (2000) (internal citations omitted)  
However, as L3 rightly concedes, it is not that voluntary cessation could never support a 
dismissal for mootness, just that the party seeking dismissal must also demonstrate that 
the objected to actions will not recur.  Hence, in County of Los Angeles, the Supreme 
Court explained that the voluntary cessation doctrine would not apply if:  “it can be said 
with assurance that ‘there is no reasonable expectation . . .’ that the alleged violation will 
recur, and (2) interim relief or events have completely and irrevocably eradicated the 
effects of the alleged violation.’”  440 U.S. at 631 (citations omitted); see also United 
States v. W.T. Grant Co., 345 U.S. 629, 633 (1953) (though the burden is “heavy,” a case 
may be dismissed as moot if the defendant can demonstrate that there is “no reasonable 
expectation that the wrong will be repeated.”). 
 
The motion here turns on the question of what “wrong” is at issue.  The 
government argues that the wrong at issue is delimited by the COFDs being appealed:  
the government’s rejection of cost submissions for particular contract years, which the 
government asserts it will never again reject.  No argument is made by L3 that these will 

7 
ever return.  If the government is correct (and it is), the voluntary cessation doctrine does 
not apply because there is no reasonable expectation that the wrong will be repeated. 
 
L3 appears to see the wrong(s) that may be repeated as the government’s 
challenges to L3’s corporate travel policy and its use of its statistical means of 
challenging its incurred cost submissions.  See, e.g., app. opp’n at 20.  If those were the 
wrongs that these appeals could legally eliminate, we would agree that the voluntary 
cessation doctrine might require our denial of the government’s motion.  They aren’t. 
 
These appeals do NOT seek a declaratory judgment or injunctive relief finding 
L3’s corporate travel policy appropriate or preventing the statistical sampling 
methodology which L3 finds so objectionable.10  Thus, if we refused to dismiss the 
appeals, and if L3 were to obtain a complete legal victory on the merits, the remedy that 
L3 would obtain would be no more than it is already getting by the withdrawal of the 
COFDs:  it would no longer be obliged to repay the government the costs set forth in 
the three withdrawn COFDs.  L3 and the dissent appear to be laboring under the 
mistaken notion that winning on the merits here would, per se, decide the propriety of 
L3’s travel policies once and for all and prevent the future use of DCAA’s statistical 
sampling and extrapolation methodologies in other audits, but there is no basis for such 
a belief.  After all, entitlement to a decision on an appeal is not the same thing as 
entitlement to binding precedent, generalized beyond the years of a particular dispute, 
upon the issues of interest to a particular party.11  To be sure, a victory on the merits 
would be satisfying to L3 and present a rhetorical cudgel to use against DCAA in the 
future – perhaps even to persuasive effect – but the only thing certain that it would do 
for L3 would be to provide relief for the years at issue and that is already being given.12  
That is why we have placed so much emphasis on the “legally cognizable relief” part of 
the mootness definitions, for it defines the arena in which the mootness analysis and, 
necessarily, its exceptions apply.  The 10th Circuit Court of Appeals came to a similar 
conclusion in Chihuahuan Grasslands Alliance v. Kempthorne, 545 F.3d 884 (10th Cir. 
2008), a case in which the plaintiffs fought a motion to dismiss on mootness grounds by 
arguing that the court was presented with a case of both voluntary cessation, and 
                                              
10 Given the fact that, at L3’s demand, the government filed the complaint here, this is 
hardly surprising.  But even if L3 had filed the complaint, itself, we are not so 
certain that its appeal of the government’s claims would have entitled it to seek such 
relief – a matter which we need not address as it remains hypothetical, just as the 
possibility of a claim seeking a contractual interpretation finding L3’s travel policies 
to be appropriate or barring the use of DCAA’s statistical modeling would be.   
11 To state the obvious, the law provides a way for a litigant to get that binding precedent:  
declaratory or injunctive relief.  If a party wants it, it must explicitly seek it, rather 
than hoping to obtain it as an incidental consequence of its monetary claims. 
12 Moreover, if “case or controversy” has any meaning at all, merely symbolic wins, with 
no formal legal consequence, no matter how helpful to a party, are not what courts 
are for.  See, e.g., Massachusetts v. E.P.A., 549 U.S. 497, 547 (2007) (Roberts, CJ, 
dissenting). 

8 
“capable of repetition yet evading review” (which we address below).  The Court of 
Appeals held that, for purposes of mootness determination, it was proper to “rely on the 
claims and requests for relief in the Complaint” and not the broader issues that the 
plaintiffs later wished to address.  545 F.3d at 892-93.  Such are the circumstances here. 
 
IV. The Dismissed Appeals Are Not an Injury Capable of Repetition, Yet 
Evading Review 
 
If the voluntary cessation doctrine may be thought of as preventing one of the 
interested parties from pulling the rug out from under the other, “capable of repetition, 
yet evading review” is the circumstance where the very nature of the alleged wrong 
precludes judicial review because its duration is too short, but the controversy is expected 
to return.  It was first enunciated in S. Pac. Terminal Co. v. ICC, 219 U.S. 498 (1911), 
and has been part of jurisprudence ever since, recently discussed in a procurement 
context by the Supreme Court in Kingdomware Technologies, Inc. v. United States, 
136 S. Ct. 1969 (2016).  As summed up in Kingdomware:   
 
[T]his Court’s precedents recognize an exception to the 
mootness doctrine for a controversy that is “‘capable of 
repetition, yet evading review.’”  Spencer v. Kemna, 523 U.S. 
1, 17, 118 S.Ct. 978, 140 L.Ed.2d 43 (1998).  That exception 
applies “only in exceptional situations,” where (1) “the 
challenged action [is] in its duration too short to be fully 
litigated prior to cessation or expiration,” and (2) “there [is] a 
reasonable expectation that the same complaining party [will] 
be subject to the same action again.”  Ibid. (internal quotation 
marks omitted; brackets in original). 
 
136 S. Ct. 1976.  But this is not the kind of case for which this exception applies.  
First, nominally, there would be ample time for the matter to be reviewed by the Board or 
the Court of Federal Clams.  Cost allowability determinations, like the ones at issue here, 
are not the type of actions that end after a given period time; rather, they have no 
expiration date and are simply about who is entitled to a certain amount of money. 
 
Moreover, L3 obtained its full remedy:  full review was, in fact, available and the 
only reason that a judicial decision wasn’t issued was because it was not necessary. 
 
To the extent that L3 attempts to argue that the government’s actions are what 
made the duration too short to afford review (see app. opp’n at 32-33), thus placing this 
matter into the capable of repetition yet evading review rubric, it has made the logical 
fallacy known as a category error.  For under this approach, all instances of voluntary 
cessation would fall within the capable of repetition yet evading review classification and 
there would be no point in the separate analysis.  It is more consistent with the legal 
paradigm of mootness exceptions to review the government’s actions here under the 
voluntary cessation umbrella.  Moreover, as discussed above, the unavailability of a 

9 
legally cognizable remedy deprives us of a case or controversy, leaving no basis to apply 
the second exception, even if it were otherwise proper to do so. 
 
CONCLUSION 
 
Because these appeals are moot, they are dismissed.  This action makes L3’s 
motion for summary judgment, itself, moot, since we no longer possess jurisdiction over 
these appeals, and we deny it as such. 
 
Dated:  March 1, 2021 
 
 
 
J. REID PROUTY 
Administrative Judge 
Vice Chairman 
Armed Services Board 
of Contract Appeals 
 
I concur 
 
 
 
 I concur 
 
 
 
RICHARD SHACKLEFORD 
Administrative Judge 
Acting Chairman 
Armed Services Board 
of Contract Appeals 
 ELIZABETH WITWER 
Administrative Judge 
Armed Services Board 
of Contract Appeals 
 
 
I dissent (see separate opinion) 
 
 
 
CRAIG S. CLARKE 
Administrative Judge 
Armed Services Board 
of Contract Appeals 
 
  


10 
DISSENTING OPINION BY ADMINISTRATIVE JUDGE CLARKE 
 
I respectfully dissent because I believe the mootness exception applies.  The 
majority decision subjects L3 (and other contractors) to the unfortunate chain of events 
discussed below until DCAA and DCMA resolve whatever their differences are.  I wrote 
the original decision with which my colleagues disagree.  I have attached my original 
decision as my dissent.13 
 
In these appeals of government claims, the contracting officer unequivocally 
withdrew the supporting final decisions stating the claims would not be asserted again 
rendering the appeals moot.  I find that the final decisions are moot.  For the first time, 
the Board should allow a moot case to proceed based on the exception to mootness 
doctrine.  After resolving the mootness matter, I interpret FAR 31.201-3, Determining 
reasonableness, to properly allocate the burden of proof.  Finally, I would deny L3’s 
motion, which I deem to be a motion for summary judgment, because of material 
disputed facts concerning allowability of L3’s costs.  The Board has jurisdiction pursuant 
to the Contract Disputes Act of 1978 (CDA), 41 U.S.C. §§ 7101-9.   
 
STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION 
 
Relevant FAR Clauses 
 
1.  Two FAR clauses14 play an important role in the Defense Contract Audit 
Agency (DCAA) Audits:   
 
FAR 31.201-2, Determining allowability. 
 
(a) A cost is allowable only when the cost complies with all 
of the following requirements:   
 
(1) Reasonableness. 
 
(2) Allocability. 
 
(3) Standards promulgated by the CAS Board, if 
applicable, otherwise, generally accepted accounting 
principles and practices appropriate to the 
circumstances. 
 
(4) Terms of the contract. 
                                              
13 I attempted to resolve the change from “we” to “I” in adapting my decision to a dissent 
but may not have been totally successful. 
14 I do not list FAR 31.201-4, Allocability, because there is no disagreement over the fact 
these costs are allocable to L3’s contracts. 

11 
 
(5) Any limitations set forth in this subpart. 
 
And:   
 
FAR 31.201-3, Determining reasonableness. 
 
(a) A cost is reasonable if, in its nature and amount, it does 
not exceed that which would be incurred by a prudent 
person in the conduct of competitive business. 
Reasonableness of specific costs must be examined with 
particular care in connection with firms or their separate 
divisions that may not be subject to effective competitive 
restraints.  No presumption of reasonableness shall be 
attached to the incurrence of costs by a contractor.  If an 
initial review of the facts results in a challenge of a 
specific cost by the contracting officer or the contracting 
officer’s representative, the burden of proof shall be upon 
the contractor to establish that such cost is reasonable. 
 
(b) What is reasonable depends upon a variety of 
considerations and circumstances, including- 
 
(1) Whether it is the type of cost generally recognized as 
ordinary and necessary for the conduct of the 
contractor’s business or the contract performance; 
 
(2) Generally accepted sound business practices, 
arm’s-length bargaining, and Federal and State laws 
and regulations; 
 
(3) The contractor’s responsibilities to the Government, 
other customers, the owners of the business, 
employees, and the public at large; and 
 
(4) Any significant deviations from the contractor’s 
established practices. 
 
DCAA Audit Methodology15  
 
2.  The method DCAA uses to conduct its audits depends on the volume of cost 
data.  In a few situations the volume of cost data may be small enough that DCAA can 
                                              
15 I readily admit that the audit reports, expert reports and briefs do not afford a complete 
understanding of DCAA’s procedures to include Dollar Unit Sampling (DUS), 

12 
conduct a 100% audit.  In most situations the data is voluminous making 100% audit 
impossible.  In these situations DCAA must use statistical analysis to perform its audits 
and reach its conclusions.  DCAA has an in-house developed statistical tool called 
“EZ-Quant” that it uses to select a sample based on DCAA’s size criteria and then 
conducts a 100% audit of the sample to determine the questioned costs in the sample.  
DCAA then “extrapolates” the questioned costs in the sample to the remaining costs to 
arrive at its conclusions on total unallowable costs (app. opp’n at 10-11, 15-16, 24)16.  At 
times DCAA will question the accuracy EZ-Quant results and resort to a sample based on 
auditor judgmental selection (app. opp’n at 11).  DCAA discusses its methodology in its 
opposition, here is an example:   
 
DCAA auditor Cynitra Kennard, under the supervision of 
Mr. North, audited L3’s shelter differential costs for 
2011-2014, and selected a sample of transactions using 
EZ-Quant.  Ms. Kennard testified that she used EZ-Quant 
again to audit shelter differential costs for 2015-2016. 
Kennard Dep. at 28:12-18.  The 2015-2016 audit report 
confirms that DCAA used statistical sampling methodology 
to select a sample and extrapolate questioned costs.  Ex. 25 
at 55.  For 2017, Ms. Kennard likewise used EZ-Quant and 
statistical sampling to extrapolate questioned costs for L3’s 
off-site living allowances.  Id. at 26:20-22; Ex. 26 at 43-44. 
Ms. Kennard also testified that she used EZ-Quant to select 
the sample transactions from the shelter differential account 
for the 2018 ICP audit, which is ongoing.  Kennard Dep. at 
26:3-17. 
 
(App. opp’n at 16)  
 
The DCAA Audits 
 
3.  These claims were audited by DCAA resulting in Audit Reports for L3’s 
Mission Integration Division (MID), dated September 27, 2017, and Platform Integration 
Division (PID), dated February 14, 2018.  The audit report for MID are 9511-
2011G10100001, 9511-2012G10100001, 9511-2013G10100001 and 9511-
2014G10100002 for L3’s fiscal years 2011 to 2014 (R4, tab 2).  The audit report for PID 
are 9511-2011W10100001, 9511-2012W10100001, 9511-2013W10100001 for L3’s 
fiscal years 2011 to 2013 (R4, tab 3).   
 
4.  In the audit reports for MID, DCAA questioned the following costs:   
                                              
Physical Unit Sampling (PUS), and judgmental selection, but I have sufficient 
detail required for our decision.   
16 I rely on L3’s Statement of Facts because DCMA generally agrees with L3’s facts 
except for certain characterizations (gov’t resp. at 2-3). 

13 
 
• $56,285 of the contractor’s claimed CFY 2011-2014 Indirect Labor costs. 
 
• $5,539,395 of the contractor's claimed CFY 2011-2014 Outside Services 
costs.  
 
• $4,359,465 of the contractor’s claimed CFY 2011-2014 Employee 
Relocation costs. 
 
• $67,153 of the contractor’s claimed CFY 2011-2014 Settlement to Cost 
Center costs. 
 
• $178,270 of the contractor’s claimed CFY 2011-2014 Indirect Travel 
Airfare costs. 
 
• $137,975 of the contractor’s claimed CFY 2011 L3 Corporate Allocation 
costs. 
 
• $288,719 of CFY 2014 Corporate Home Office Allocation costs. 
 
• $791,170 of the contractor’s claimed CFY 2011 Home Office Allocation 
costs. 
 
• $14,337,524 of the contractor’s claimed Direct Costs.  Exhibit C identifies 
the questioned amounts by account. 
 
(R4, tab 2 at 4)  DCAA provided additional detail in Exhibit A (Indirect costs), 
Schedule A-07 (R4, tab 2 at 20-45), and Exhibit C (Direct costs), Schedule C-05 (R4, 
tab 2 at 80-100).  At the end of the audit DCAA offered to provide more information, 
“Due to the voluminous nature of the calculations related to these questioned costs, 
additional information will be provided upon request” (R4, tab 2 at 100). 
 
5.  In the audit reports for PID, DCAA questioned the following costs:   
 
• $297,177 ($267,113 + $30,064) of the contractor’s claimed CFYs 20112013 
Indirect Travel – Airfare costs. 
 
• $128,246 of the contractor’s claimed CFYs 2011-2013 Bonus Costs which 
are included in the claimed Fringe Expenses. 
 
• $37,511 of the contractor’s claimed CFY 2011 Workers Compensation 
Fringe Costs. 
 
• $82,429 of the contractor’s claimed Direct Costs. 
 

14 
(R4, tab 3 at 6)  DCAA provided supporting detail in Exhibit A, indirect costs 2011-2013 
(id. at 12); Schedule A-01, air travel and marketing, G&A and engineering for 2011 (id. 
at 16-18); Schedule A-02, engineering air travel for 2011 (id. at 21); Schedule A-03, 
fringe for 2011 (id. at 22-25); Schedule A-04, G&A air travel for 2012 (id. at 26); 
Schedule A-05, engineering air travel for 2012 (id. at 27); Schedule A-06, fringe for 2012 
(id. at 28); Schedule A-07, G&A air travel for 2013 (id. at 29); Schedule A-08, 
engineering airfare for 2013 (id. at 30); Schedule A-09, fringe air travel for 2013 (id. 
at 31); Exhibit B, penalties for 2011 to 2013 (id. at 32-44); and Exhibit C, direct costs air 
travel for 2011 to 2013 (id. at 45-47).   
 
DCMA Contracting Officer Final Decisions17  
 
6.  According to the Board’s docketing notice (R4, tab 4 at 1) the following 
ASBCA Nos. are associated with the following government claims:   
 
ASBCA No. Claim 
61810 Government claim for $347,915 
61811 Government claim for $10,692,605 
61812 Government claim for $572,318 
61813 Government claim for $6,002 
61814 Government claim for $2,542 
 
ASBCA No. 61810 was settled and dismissed with prejudice.  ASBCA No. 61812 
was dismissed without prejudice for lack of jurisdiction leaving ASBCA Nos. 61811, 
61813 and 61814 active in this appeal.   
 
7.  On June 28, 2018, Ms. Gladys Broyles, Defense Contract Management Agency 
(DCMA) Administrative Contracting Officer (ACO), issued a Contracting Officer’s Final 
Decision (COFD) demanding payment of $10,692,605 based on DCAA Audit Report 
Nos. 9511-2011G10100001, 9511-2012G10100001, 9511-2013G10100001,  
9511-2014G10100002, dated September 27, 2017 (R4, tab 4 at 28).  Based on the 
docketing notice this COFD relates to ASBCA No. 61811.  ACO Broyles broke down her 
decision into six unallowable direct cost amounts:   
 
ODC Travel Air $1,335,924 
ODC Hotel $443,368 
ODC Meals $210,771 
ODC Shelter Differential $7,602,056 
ODC Other $1,100,486 
G&A $1,722,601 
 
                                              
17 At this point it is difficult, but also unnecessary, to trace the dollar amounts in the 
audits directly to the amounts in the final decisions. 

15 
(R4, tab 4 at 30-31)  ACO Broyles provided the rational for her finding in six notes 
associated with each of the six amounts disallowed (id. at 31-40).  ACO Broyles 
repeatedly relied on FAR 31.201-3(a) to place the burden to prove challenged costs are 
reasonable on L3 (id. at 31-38). 
 
8.  On June 29, 2018, ACO Cheryl Clark issued a COFD demanding payment of 
$6,002 based on DCAA Audit Report No. 9511-2011W10100001 (R4, tab 4 at 71).  Based 
on the docketing notice this COFD relates to ASBCA No. 61813.  ACO Clark explained 
the $6,002 as follows, “This pertains to contract number FA8620-10-G-3023-1118 
regarding the travel expenses of Frank Franklin and Mark Cross from January 1, 2012 to 
January 12, 2015 outlined in document numbers 19003022785 and 1900303999” (id.).  
ACO Clark further explained, “Under FAR 31.201-3(a) if the contracting officer 
challenges the specific costs . . . ‘the burden of proof shall be upon the contractor to 
establish that such cost is reasonable.’  As a result, in order to establish reasonableness, L3 
PIO has the burden of justifying the need for premium airfare under FAR 3 l-205-46(b) to 
include FAR 3 l.205(46)(a)(7)” (id. at 73). 
 
9.  On June 29, 2018, ACO Jennings L. Summers issued a COFD demanding 
payment of $2,542 based on DCAA Audit Report No. 9511-2011W10100001 (R4, tab 4 
at 79).  Based on the docketing notice this COFD relates to ASBCA No. 61814.  ACO 
Summers explained that the disallowed amount related to air travel by Mr. Bays.  ACO 
Summers further explained, “Given the above, under FAR 31.201-3(a), I cannot find that 
a reasonably prudent person would incur the cost of business class airfare for air travel of 
three hours.  The return coach airfare trip supports my position.  As a result, under 
31.201-3(a) the burden of proof is on L3 to establish reasonableness fell to L3” (Id. 
at 81).   
 
L3 Appeals 
 
10.  L3 appealed the COFDs to the Board (app. opp’n at 11 ¶ 22). 
 
DCMA Withdraws the COFDs and Moves for Dismissal 
 
11.  On February 28, 2020 DCMA ACO Charles A. McGlothen withdrew the 
COFDs:   
 
I hereby unequivocally withdraw the Contracting Officer’s Final 
Decisions (“COFDs”) and demands for payment dated 28 June 2018 
(ASBCA No. 61811), signed by Gladys Broyles, 29 June 2018 
(ASBCA No.60813) signed by Cheryl L. Clark, and 29 June 2018 
(ASBCA No.60814), signed by Jennings L. Summers that have been 
appealed to the ASBCA and assigned the respective docket numbers.  
A motion for dismissal of those appeals will be filed by the assigned 
trial attorney.  The Government does not intend to re-assert the costs 
at issue in those disputes. 

16 
 
(Gov’t mot., ex. 1)  DCMA filed a Motion to Dismiss on the same day, February 28, 
2020 (gov’t mot.). 
 
Other Audit Disputes 
 
12.  In its opposition to DCMA’s motion to dismiss, L3 summarizes similar audit 
disputes between L3 and DCAA/DCMA from 2006 through 2018.  These disputes all 
followed a similar path:  DCAA conducts Audits challenging costs, DCMA issues 
COFDs implementing the DCAA Audits and demanding repayment of the challenged 
costs, L3 appeals the COFDs to the Board and DCMA either withdraws the COFDs or 
the parties settle for a nuisance amount resulting in dismissal of the appeals with 
prejudice (app. opp’n ¶¶ 3-5 (2006), 6-8 (2007), 9-12 (2008), 13-15 (2009) and 16-19 
(2010).  The disputes involved in this decision followed a similar path but remain 
unresolved (app. opp’n ¶¶ 20-22 (CYs 2011 to 2014)).  There are several similar appeals 
that have been stayed pending resolution of the appeals in ASBCA Nos. 61811, 61813 
and 61814 (app. opp’n ¶¶ 27-28, 33 (CYs 2011 to 2016)).   
 
13.  In its opposition, L3 makes the point that this cycle of DCAA Audit using 
statistical analysis and extrapolation, DCMA COFDs, appeal and withdrawal of the 
COFDs is seen from 1006 through 2018:   
 
As described above, DCMA ACOs have issued COFDs 
disallowing L3’s airfare costs year after year since 2006 and 
then subsequently withdrew the claims or settled for nuisance 
amounts.  This dispute has continued with DCAA’s 2015-2016 
and 2017 audit reports. 
 
(App. opp’n at 16)  And:   
 
However, it is clear that DCAA continues to question the 
same types of costs for the same reasons, and DCAA also 
continues to use the same purported statistical sampling 
methods. 
 
(App. opp’n at 15)  And:   
 
During those depositions, several of the auditors who were 
involved in subsequent audits of ICPs (i.e., the 2015, 2016, 
2017, and 2018 ICPs) admitted that DCAA employed 
statistical sampling to extrapolate and question costs in those 
subsequent audits. 
 
(App. opp’n at 15)  And:   
 

17 
As of the date of this filing, DCMA has not issued a COFD 
sustaining the costs questioned in those reports.  However, it 
is clear that DCAA continues to question the same types of 
costs for the same reasons, and DCAA also continues to use 
the same purported statistical sampling methods. 
 
(App. opp’n at 15) 
 
Expert Witnesses 
 
14.  Each party employed an expert and submitted an expert report.  Neither party 
objected to the expert status of the other party’s expert, therefore, I find both witnesses 
qualify as experts in statistical analysis. 
 
15.  L3’s expert is Mr. Lynford Graham.  In his expert report Mr. Graham explains 
that he was hired by L3 “to comment on the applications of statistical sampling in the 
Defense Contract Audit Agency (DCAA) claims of questioned costs as stated in the 
2 audit reports at issue in the appeals of L3 Technologies, Inc. (L3), ASBCA Nos. 61810, 
61811, 61813, 61814” (app. opp’n, ex. 22 at 4-5).  Mr. Graham concludes that DCAA’s 
methods using Dollar Unit Sampling (DUS), Physical Unit Sampling (PUS), DCAA’s 
sample size selection, and DCAA’s “EZ-Quant” software used by the DCAA to apply 
statistical techniques all result in unreliable results (id. at 5-6).  Specifically, DCAA’s 
methods and software used “for the purpose of estimating questioned costs are not 
supportable” (id. at 6).  Attached to Mr. Graham’s report is Appendix A:  Summary of 
Sampling Applications in L3 Technology Audits (id. at 46).  The table indicates that 
sampling was used for six out of eight costs.  By way of explanation I look at employee 
relocation costs.  According to the table, DUS sampling was used on a “population” of 
$7,822,914 using a sample of 89 resulting in disallowing $4,359,45618 (id.). 
 
16.  DCMA’s expert is Mr. Ali Arab.19  In his rebuttal report Mr. Arab starts out 
by distinguishing DCAA audits, “The audits performed by DCAA are significantly 
different than financial audits.  The purpose of an incurred cost audit (the subject of the 
L3 ASBCA cases) is to provide an opinion on the contractor’s certified assertion that the 
incurred cost submission does not contain unallowable costs” (app. opp’n, ex. 23 at 6).  
He further explained:   
 
My report is focused on DCAA’s sampling program as used 
in the L3 audits.  It is important to note that DCAA 
questioned a total of $26.2 million; of which $5.6 million 
(21.4 percent) was based on statistical sampling projections.  
                                              
18 The table is not completely self-explanatory and the numbers may be a little off 
because the table is a bit illegible but it serves its purpose for this decision. 
19 DCMA produced Mr. Arab’s expert rebuttal report but expressed its intention not enter 
it into evidence (gov’t resp. at 22). 

18 
The remaining $20.6 million is based on methods outside of 
the use of statistical sampling. 
 
(Id. at 7)  Mr. Arab found that the sample sizes used by DCAA were based on 80% not 
90% confidence level and were therefore smaller than DCAA desired.  DCAA’s use of 
DUS sample size planning procedure also contributed to a small sample size (id. at 8).  
He explained that when DCAA used statistical samples to calculate questioned costs, the 
DCAA audit reports present the point estimate as the most likely amount of the true 
questioned costs in the audit universe under review (id. at 11-12).  Mr. Arab conducted an 
in-depth review of EZ-Quant and did not identify any issues or concerns (id. at 15). 
 
17.  Mr. Arab explained that Audit Report No. 09511-2011G10100001, dated 
September 27, 2017, used statistical sampling for 21.8 percent of the total questioned 
costs while the remaining questioned costs were from reviewing individual transitions 
using judgmental selection (id. at 15-16).  None of the questioned costs in Audit Report 
No. 09511-2011W10100001, dated February 14, 2018, resulted from projections of 
statistical samples.  All costs questioned were from review of each transaction using 
judgmental selection.  (Id. at 16)  Mr. Arab also attached a table at the end of his expert 
report presenting DCAA’s methods of arriving at its questioned coasts (id. at 22). 
 
DCAA TOP Note 
 
18.  On January 17, 2020, DCAA, apparently relying on Mr. Arab’s findings, 
issued a “TOP Note” that changed the sample size for Dollar Unit Sampling:   
 
Dollar Unit Sampling (DUS):  DCAA's sampling program is 
intended to use a two-sided limit at the 90 percent confidence 
level.  However, our evaluation determined that the AICP A 
Table we have used to determine minimum sample sizes is 
'based on a one-sided confidence limit.  Consequently, the 
sample sizes correspond to a two-sided limit at the 80 percent 
confidence level; not the two-sided limit at the 90 percent 
confidence level we had instructed. 
 
Using a lower confidence level results in sample sizes that are 
smaller than desired which impacts the confidence we have in 
the point estimate.  As a result, our sample sizes will increase.  
To address this issue, when performing a DUS sample, please 
use the chart below to determine minimum sample sizes.  
(Chart omitted). 
 
(App. opp’n, ex. 24 at 2)  DCAA also changed the sample size for Physical Unit 
Sampling:   
 

19 
Physical Unit Sampling (PUS):  Prior to this Top Note, 
DCAA used the DUS sample size planning procedure for a 
physical unit sample.  We determined this methodology is not 
justifiable as the underlying theory for these two methods are 
quite different.  Consequently, the sample sizes determined 
for PUS using this approach may potentially be smaller than 
required for a statistically valid sample.  To address this issue, 
when performing a PUS sample, please use the EZ Quant 
sample sizer to determine the appropriate sample size.  The 
Table is no longer valid for PUS.  Enclosure 1 provides 
details on how to use the EZ Quant Sample Sizer. 
 
(Id. at 3) 
 
DECISION 
 
Procedural Background 
 
After L3 appealed DCMA’s COFDs (SOF ¶ 10), ACO Charles A. McGlothen 
issued a February 28, 2020 letter “unequivocally” withdrawing COFDs for Appeal 
Nos. 61811, 61813 and 61814.  The ACO stated, “The Government does not intend to re-
assert the costs at issue in those disputes” (SOF ¶ 11).  Also on February 28, 2020, 
DCMA filed with the Board a Motion to Dismiss ASBCA Nos. 61811, 61813 and 61814 
as moot (id.). 
 
Rather than accepting dismissal, L3 chose to fight.  On March 4, 2020 L3 filed its 
Opposition to Government’s Motion to Dismiss and Cross-Motion for a Decision 
Sustaining the Appeals (app. opp’n).  On April 16, 2020 DCMA filed its Response to 
Appellant’s Opposition and Cross-Motion arguing that the appeals were moot (gov’t 
resp.).  On May 18, 2020, L3 filed its Reply in Support of its Opposition to the 
Government’s Motion to Dismiss and Cross-Motion for a Decision Sustaining the 
Appeals (app. reply).  I view L3’s Cross-Motion for a Decision Sustaining the Appeals as 
a Motion for Summary Judgment.   
 
The details of above procedural posture is a little confusing.  However, the “big 
picture” is that first I must decide if the appeals are moot and if so, does the mootness 
exception apply?  If the exception applies, I address L3’cross motion that I deem a 
Motion for Summary Judgment.  As explained below, I find the appeals are moot but the 
mootness exception applies and I deny L3’s motion.  Therefore, L3 may continue to 
pursue its appeals and (1) challenge DCAA’s statistical audit procedures and 
extrapolation of costs found to be unallowable and (2) prove the reasonableness of the 
alleged unallowable costs. 
 

20 
Positions of the Parties 
 
DCMA believes that the appeals should be dismissed as moot based on the 
unequivocal withdrawal of the final decisions and promise not to reassert the claims 
(gov’t mot. at 1).  DCMA opposes L3’s argument that the appeal remains “live” because 
there is no possibility that DCMA will reassert the claim (gov’t resp. at 2, 4, 15, 20, 23). 
 
L3 sums up what it wants as follows:   
 
More importantly, the appeals are not moot because the issues 
presented in the appeals remain live:  L3 seeks a decision on 
the merits to resolve the issues presented in these appeals—
the continuing dispute over the correct interpretation of 
various FAR sections related to L3’s incurred costs and 
DCAA’s use of purported “statistical” sampling to extrapolate 
questioned costs—which remain live despite the withdrawal 
of the COFDs. 
 
(App. opp’n at 24)  L3 argues that DCAA’s statistical sampling and “extrapolation” of 
questioned costs is flawed.  L3 argues, “EZ-Quant is DCAA’s fundamentally flawed 
statistical sampling software application” (app. opp’n. at 16). 
 
Next L3 raises the issue of the correct interpretation of various FAR sections 
related to L3’s incurred costs.  Central to L3’s position is the allocation of burden of 
proof.  L3 contends that since these are government claims, DCMA has the burden of 
proof.  L3 reasons that since DCMA abandoned its claims, L3 is entitled to judgment on 
the merits due to DCMA’s failure to prove its case.   
 
ASBCA Nos. 61811, 61813 and 61814 are Moot 
 
The Board has many decisions dismissing appeals as moot.  One of the latest is 
Quimba Software, Inc., ASBCA No. 59197, 19-1 BCA ¶ 37350:   
 
In seeking dismissal of the appeal on the ground of mootness, 
the government argues that the ACO granted all the relief that 
Quimba sought by voluntarily rescinding the demand for 
repayment of indirect costs paid through provisional billing 
rates and stating that it does not intend to issue another 
decision disallowing the same costs (gov’t mot. at 3-5; see 
statement 7). 
 
Quimba opposes the dismissal.  Quimba's main argument is 
that, while the final audit report was issued in 2008, the 
government waited until December 2013, after expiration of 

21 
the Contract Disputes Act statute of limitations, 41 U.S.C. 
§7103(a)(4)(A), to issue the final decision. 
 
. . . . 
 
We reject Quimba's argument and dismiss the appeal as moot. 
 
(Id. at 181,613)  In Beechcraft Defense Co., ASBCA No. 61550, 18-1 BCA 
¶ 37,069 we wrote:   
 
Where a contracting officer unequivocally rescinds a final 
decision asserting a government claim, there is no longer any 
claim before the Board to adjudicate, and the Board has 
dismissed the appeal as moot.  URS Federal Support Services, 
Inc., ASBCA No. 60364, 17-1 BCA ¶36,587 at 178,204; 
Combat Support Associates, ASBCA Nos. 58945, 58946, 16-1 
BCA ¶36,288 at 176,973.  Accordingly, the appeal is 
dismissed as moot. 
 
(Id. at 180,431)  I find that DCMA’s February 28, 2020 “unequivocal” withdrawal of 
COFDs in ASBCA Nos. 61811, 61813 and 61814 and promise not to “re-assert the costs 
at issue in those disputes” (SOF ¶ 11) renders these appeals moot. 
 
The Exception to Mootness20  
 
At the risk of stating the obvious, this repetitive cycle of DCAA Audits 
challenging costs, DCMA COFDs demanding repayment of the challenged costs, L3’s 
ASBCA appeals and DCMA’s dismissals without reaching the merits is untenable  
(SOF ¶¶ 12-13).21  The root cause of why DCMA first adopts DCAA’s audit results and 
then abandons the audits after an appeal is filed is unclear. 
 
                                              
20 The majority seems to focus on “voluntary cessation” not the mootness exception. 
21 This situation is apparently not limited to L3.  Quimba Software, Inc., ASBCA 
No. 59197, 19-1 BCA ¶ 37350; Advanced Powder Solutions, Inc., ASBCA 
No. 61818, 19-1 BCA ¶ 37425; Northrop Grumman Corp., ASBCA No. 61771, 
2019 WL 5089236; Northrop Grumman Corp., ASBCA No. 61345, 2019 WL 
4908683; L3 Communications Integrated Systems, L.P., ASBCA No. 60431, 16-1 
BCA ¶ 36362; Sygnetics, Inc., ASBCA No. 60357, 18-1 BCA ¶ 37160; 
Flightsafety International Inc., ASBCA No. 60415, 2018 WL 7200012; Combat 
Support Associates, ASBCA No. 58945, 16-1 BCA ¶ 36288; Beechcraft Defense 
Co., ASBCA No. 61550, 18-1 BCA ¶ 37069;  York International Corp.-York Navy 
Systems, ASBCA No. 60561, 2016 WL 3565932;  Autonomous Solutions, Inc., 
ASBCA No. 59131, 2014 WL 518988. 

22 
I start with the Supreme Court’s discussion of the exception to mootness in 
Weinstein v. Bradford, 96 S.Ct. 347 (1975).  In Weinstein v. Bradford the Supreme Court 
did not apply the exception to mootness doctrine but did discuss it in the process of 
reaching its decision:   
 
In Sosna v. Iowa, 419 U.S. 393, 95 S.Ct. 553, 42 L.Ed.2d 532 
(1975), we reviewed in some detail the historical 
developments of the mootness doctrine in this Court.   
Southern Pacific Terminal Co. v. ICC, 219 U.S. 498, 31 S.Ct. 
279, 55 L.Ed. 310 (1911), was the first case to enunciate the 
“capable of repetition, yet evading review” branch of the law 
of mootness.  There it was held that because of the short 
duration of the Interstate Commerce Commission order 
challenged, it was virtually impossible to litigate the validity 
of the order prior to its expiration.  Because of this fact, and 
the additional fact that the same party would in all probability 
be subject to the same kind of order in the future, review was 
allowed even though the order in question had expired by its 
own terms. 
 
Sosna decided that in the absence of a class action, the 
“capable of repetition, yet evading review” doctrine was 
limited to the situation where two elements combined:  (1) the 
challenged action was in its duration too short to be fully 
litigated prior to its cessation or expiration, and (2) there was 
a reasonable expectation that the same complaining party 
would be subjected to the same action again. 
 
(Id. 348-49) 
 
I found no ASBCA decisions applying this exception to mootness, but I did find 
one decision acknowledging its existence.  In Combat Support Associates, ASBCA 
No. 58945, 16-1 BCA ¶ 36288 we stated:   
 
We disagree with CSA that we are confronted with a dispute 
that is “capable of repetition, yet evading review.”  A case is 
moot when the issues presented are no longer “live” or the 
parties lack a legally cognizable interest in the outcome.  
Humane Society of the United States v. Clinton, 236 F.3d 
1320, 1331 (Fed. Cir. 2001).  However, a claim is not moot if 
that action is capable of repetition, yet evading review.  Id.  
To qualify for this exception, the challenged action must meet 
two conditions.  Id.  First, the action must in its duration be 
too short to be fully litigated prior to its cessation or 
expiration.  Id.  Second, there must be a reasonable likelihood 

23 
that the party will again suffer the injury that gave rise to the 
suit.  Id.   
 
(Id. at 176,974)  I conclude from Combat Support Associates that there is no impediment 
to the Board’s reliance on the mootness exception in the right circumstances.  If there was 
ever the “right circumstance,” this is it.   
 
DCMA’s Position 
 
DCMA opposes the application of the “exception” to mootness as follows:   
 
There is no unlawful activity or wrongful behavior.  Second, 
the exception applies when the wrongful behavior is capable 
of repetition.  While it is clear that the Government will 
continue to determine the allowability of airfare costs in 
future incurred cost submissions for both L3 and other 
contractors and may continue to utilize statistical sampling in 
estimating the amount of those unallowable costs, the 
Government’s future practice will not affect L3’s entitlement 
to the costs originally questioned in the Government claims at 
issue in these appeals.[22] 
 
(Gov’t resp. at 6-7)  I disagree with DCMA’s inference that the mootness exception 
requires “unlawful activity or wrongful behavior” or that DCMA’s “future practice will 
not affect L3’s entitlement to the costs originally questioned.”  The cases highlighted 
below do not involve unlawful activity or wrongful behavior.  DCMA’s arguments 
against the mootness exception are unpersuasive. 
 
Examples Where the Exception Applied 
 
L3 cited a number of Supreme Court and Federal Circuit cases and I selected 
three, in addition to Weinstein v. Bradford (Southern Pacific Terminal Co. v. ICC, 219 
U.S. 498, 31 S.Ct. 279, 55 L.Ed. 310 (1911)), to help us understand the exception.  In 
Kingdomware Technologies v. United States, 136 S.Ct. 1969 (2016) a veteran-owned 
small business brought a 2012 bid protest claim seeking declaratory and injunctive relief 
against Department of Veterans Affairs (VA) alleging that the Department failed to 
comply with the statutory Rule of Two generally requiring the Department to set aside 
contracts for veteran-owned small businesses.  By 2014 the contracts in question had 
been fully completed and the cases were moot.  After reciting the elements of the 
mootness exception discussed above in Weinstein v. Bradford (Southern Pacific Terminal 
Co.), the Supreme Court in Kingdomware held the exception applied:   
                                              
22 This may be true, but every time a contractor must go through this audit, final decision, 
appeal, dismissal fiasco it must incur litigation costs the government does not 
reimburse.  Settlement is even worse because the contractor is required to pay. 

24 
 
Here, no live controversy in the ordinary sense remains 
because no court is now capable of granting the relief 
petitioner seeks.  When Kingdomware filed this suit four 
years ago, it sought a permanent injunction and declaratory 
relief with respect to a particular procurement.  The services 
at issue in that procurement were completed in May 2013.  
And the two earlier procurements, which Kingdomware had 
also protested, were complete in September 2012.  See decl. 
of Corydon Ford Heard III ¶¶ 6–8.  As a result, no court can 
enjoin further performance of those services or solicit new 
bids for the performance of those services.  And declaratory 
relief would have no effect here with respect to the present 
procurements because the services have already been 
rendered. 
 
. . . . 
 
That exception applies to these short-term contracts.  First, 
the procurements were fully performed in less than two years 
after they were awarded.  We have previously held that a 
period of two years is too short to complete judicial review of 
the lawfulness of the procurement.  See Southern Pacific 
Terminal Co. v. ICC, 219 U.S. 498, 514–516, 31 S.Ct. 279, 
55 L.Ed. 310 (1911).  Second, it is reasonable to expect that 
the Department will refuse to apply the Rule of Two in a 
future procurement for the kind of services provided by 
Kingdomware.  If Kingdomware's interpretation of § 8127(d) 
is correct, then the Department must use restricted 
competition rather than procure on the open market.  And 
Kingdomware, which has been awarded many previous 
contracts, has shown a reasonable likelihood that it would be 
awarded a future contract if its interpretation of § 8127(d) 
prevails.  See decl. of Corydon Ford Heard III ¶¶ 11–15 
(explaining that the company continues to bid on similar 
contracts).  Thus, we have jurisdiction because the same legal 
issue in this case is likely to recur in future controversies 
between the same parties in circumstances where the period 
of contract performance is too short to allow full judicial 
review before performance is complete.  Our interpretation of 
§ 8127(d)'s requirements in this case will govern the 
Department's future contracting 
 
(Id. at 1975-76)  In Humane Society v. Clinton, 236 F.3d 1320 (Fed. Cir.), 
wildlife and animal protection organizations sued the President and 

25 
Secretary of Commerce seeking to compel them to renew action against 
Italy under High Seas Driftnet Fisheries Enforcement Act.  At the time of 
the Federal Circuit’s decision Italy had stopped widespread driftnet fishing 
and the case was technically moot.  However, the Federal circuit held that 
the exception to mootness applied because a claim is not moot if that action 
is capable of repetition, yet evading review:   
 
In a memorandum date-stamped April 28, 1997, concerning 
“Procedural steps under the High Seas Driftnet Fisheries 
Enforcement Act,” government attorneys recognized that the 
Driftnet Act did not explicitly address the situation if Italy 
was to continue or resume large-scale driftnet fishing after the 
Secretary's certification that driftnet fishing had ceased.  The 
memorandum stated that it was possible to read the Act to 
require a new identification of Italy under § 1826a(b)(1)(B) 
and a second round of consultations under § 1826a(b)(2) 
before the Secretary could prohibit the importation of fish 
products from Italy.  The memorandum also noted that such a 
process would appear to be incompatible with the purpose of 
the statute and could result in an annual cycle of agreements 
that appear to be adequate on paper but prove to be 
ineffectual in practice. 
 
We can assume that, if a plaintiff was to challenge the 
Secretary's certification that a nation had ceased driftnet 
fishing and brought forth adequate evidence of persistent 
proscribed driftnet fishing, the Secretary would likely identify 
that nation again.  Because of that re-identification, the 
challenge to the Secretary's prior certification would almost 
always be moot under the Government's theory.  Thus, the 
question of the propriety of the Secretary's certification would 
escape judicial review.  Even the Government's attorneys 
recognized that an ineffectual cycle of repetitious events 
could occur.  We conclude that the purpose of the Act is 
better effectuated by holding that the question, whether the 
Secretary's certification that a nation has ceased driftnet 
fishing is in accord with law, is not rendered moot by a later 
re-listing or re-identification of that nation. 
 
(Id. 1331-32)  In Federal Election Commission v. Wisconsin Right to Life, Inc., 551 U.S. 
449 (2007) a nonprofit ideological advocacy corporation sued Federal Election 
Commission (FEC), seeking declaration that “electioneering communications” provisions 
of Bipartisan Campaign Reform Act (BCRA) violated First Amendment.  Supreme Court 
ruled the dispute was not mooted by passing of the election cycle:   
 

26 
As the District Court concluded, however, these cases fit 
comfortably within the established exception to mootness for 
disputes capable of repetition, yet evading review.  (Citations 
omitted).  The exception applies where “(1) the challenged 
action is in its duration too short to be fully litigated prior to 
cessation or expiration, and (2) there is a reasonable 
expectation that the same complaining party will be subject to 
the same action again.”  (Citations omitted).  Both 
circumstances are present here. 
 
As the District Court found, it would be “entirely 
unreasonable ...  to expect that [WRTL] could have obtained 
complete judicial review of its claims in time for it to air its 
ads” during the BCRA blackout periods.  (Citation omitted) 
The FEC contends that the 2–year window between elections 
provides ample time for parties to litigate their rights before 
each BCRA blackout period.  But groups like WRTL cannot 
predict what issues will be matters of public concern during a 
future blackout period.  In these cases, WRTL had no way of 
knowing well in advance that it would want to run ads on 
judicial filibusters during the BCRA blackout period.  In any 
event, despite BCRA's command that the cases be expedited 
“to the greatest possible extent,” § 403(a)(4), 116 Stat. 113, 
note following (Citation omitted), two BCRA blackout 
periods have come and gone during the pendency of this 
action.  “[A] decision allowing the desired expenditures 
would be an empty gesture unless it afforded appellants 
sufficient opportunity prior to the election date to 
communicate their views effectively.”  (Citations omitted) 
 
3  The second prong of the “capable of repetition” exception 
requires a “ ‘reasonable expectation’ ” or a “ ‘demonstrated 
probability’ ” that “the same controversy will recur involving 
the same complaining party.”  (Citation omitted)  Our cases 
find the same controversy sufficiently likely to recur when a 
party has a reasonable expectation that it “will again be 
subjected to the alleged illegality,” (citation omitted) or “will 
be subject to the threat of prosecution” under the challenged 
law (citations omited).  The FEC argues that in order to prove 
likely recurrence of the same controversy, WRTL must 
establish that it will run ads in the future sharing all “the 
characteristics that the district court deemed legally relevant.”  
Brief for Appellant FEC 23. 
 

27 
The FEC asks for too much.  We have recognized that the “ 
‘capable of repetition, yet evading review’ doctrine, in the 
context of election cases, is appropriate when there are ‘as 
applied’ challenges as well as in the more typical case 
involving only facial attacks.”  (Citation omitted)  Requiring 
repetition of every “legally relevant” characteristic of an as-
applied challenge—down to the last detail —would effectivel y 
overrule this statement by making this exception unavailable 
for virtually all as-applied challenges.  History repeats itself, 
but not at the level of specificity demanded by the FEC.  
Here, WRTL credibly claimed that it planned on running “ 
‘materially similar’ ” future targeted broadcast ads 
mentioning a candidate within the blackout period, (citation 
omitted) and there is no reason to believe that the FEC will 
“refrain from prosecuting violations” of BCRA, (citation 
omitted).  Under the circumstances, particularly where WRTL 
sought another preliminary injunction based on an ad it 
planned to run during the 2006 blackout period, (citation 
omitted) we hold that there exists a reasonable expectation 
that the same controversy involving the same party will recur.  
We have jurisdiction to decide these cases. 
 
(Id. at 462-64) 
 
Each of these cases apply the elements needed to establish the “capable of 
repetition, yet evading review” doctrine which are (1) the challenged action was in its 
duration too short to be fully litigated prior to its cessation or expiration, and (2) there 
was a reasonable expectation that the same complaining party would be subjected to the 
same action again.”  Weinstein v. Bradford, 96 S.Ct. 347, 348-349.  I studied the Supreme 
Court’s and Federal Circuit’s application of the exception to mootness in these four 
situations.  Southern Pacific Terminal (cited in Weinstein v. Bradford) is the first case in 
which the Supreme Court applied the mootness exception because of “the short duration 
of the Interstate Commerce Commission order challenged, it was virtually impossible to 
litigate the validity of the order prior to its expiration.”  In Kingdomware Technologies it 
was the short terms of the contracts meaning they were complete before the courts could 
resolve the case; in Humane Society it was the “Secretary's certification that a nation has 
ceased driftnet fishing”; in Wisconsin Right to Life it was the short duration of BCRA 
[Bipartisan Campaign Reform Act] blackout periods.  I want to highlight a significant 
difference between these cases and L3’s situation.  In the cases cited above the “short 
duration” element of the exception was satisfied by something outside the control of 
government entity arguing that the case was moot and the exception did not apply.  Just 
the opposite in L3’s case.  It was DCMA that withdrew the final decisions cutting short 
the appeals.  It was DCMA that set up the “capable of repetition, yet evading review” 
situation.  DCMA withdraws the COFDs to moot the appeals and then argues that the 
exception does not apply.  This is unfair and makes for an even more compelling reason 

28 
to apply the exception.  As the Federal Circuit wrote in Humane Society, finding the case 
moot would lead to an “ineffectual cycle of repetitious events. . . .”  The same is true in 
L3, dismissal of these appeals as moot perpetuates the “ineffectual cycle” already seen 
between 2006 and 2018 of DCAA audits finding unallowable costs prompting DCMA 
final decisions demanding repayment, L3 appealing to the ASBCA and ultimately 
DCMA abandoning the DCAA audits leaving L3 without resolution of its defenses.  I 
conclude from the above that the first element of the mootness exception, “the challenged 
action was in its duration too short to be fully litigated prior to its cessation or expiration” 
is satisfied. 
 
The record establishes that L3 has endured this cycle of audit, final decision, 
appeal and dismissal for at least twelve years with no end in sight (SOF ¶¶ 12-13).  
Therefore, the second element of the mootness exception “a reasonable expectation that 
the same complaining party would be subjected to the same action again” is satisfied.   
 
The Mootness Exception Applies in ASBCA Nos. 61811, 61813 and 61814 
 
I would apply the mootness exception and this case would continue.  L3 is entitled 
to present its arguments to the Board.  DCAA/DCMA are likewise entitled to defend the 
audits.  This does not mean that L3 will prevail, it just gives L3 a chance to make its case.  
I move on to L3’s motion for summary judgment.   
 
Legal Standard for Summary Judgment 
 
Summary judgment is properly granted only where there is no genuine issue of 
material fact and the movant is entitled to judgment as a matter of law.  The moving party 
bears the burden of establishing the absence of any genuine issue of material fact and all 
significant doubt over factual issues must be resolved in favor of the party opposing 
summary judgment.  Mingus Constructors, Inc. v. United States, 812 F.2d 1387, 1390 
(Fed. Cir. 1987) (citations omitted).  In the course of the Board's evaluation of a motion 
for summary judgment, our role is not “‘to weigh the evidence and determine the truth of 
the matter,’ but rather to ascertain whether material facts are disputed and whether there 
exists any genuine issue for trial.”  Holmes & Narver Constructors, Inc., ASBCA 
Nos. 52429, 52551, 02-1 BCA ¶ 31,849 at 157,393 (quoting Anderson v. Liberty Lobby, 
Inc., 477 U.S. 242, 249 (1986)).  A material fact is one which may make a difference in 
the outcome of the case. Liberty Lobby, 477 U.S. at 249.  The opposing party must assert 
facts sufficient to show a dispute as to a material fact of an element of the argument for 
reformation or breach.  New Iraq Ahd Co., ASBCA No. 59304, 15-1 BCA ¶ 35,849 
at 175,291-92 (citing Mingus, 812 F.2d at 1390-91) (“To ward off summary judgment, 
the non-moving party must do more than make mere allegations; it must assert facts 
sufficient to show a dispute of material fact.”); see Lee's Ford Dock. Inc., ASBCA 
No. 59041. 16-1 BCA ¶ 36.298 at 177,010. 
 

29 
L3’s Articulation of the Burden of Proof 
 
L3 discusses burden of proof several times:   
 
A decision sustaining these appeals is appropriate in 
accordance with Board Rule 17 (or in the alternative, Board 
Rule 7(c)) and binding precedent of the Board because the 
Government has plainly indicated an intention not to continue 
the defense of the appeals and has failed to meet its burden of 
proving the costs disallowed by the COFDs are unallowable. 
 
(App. opp’n at 3)  L3 repeats this argument later in its opposition:   
 
A decision sustaining these appeals is appropriate in 
accordance with Board Rule 17, or in the alternative Board 
Rule 7(c), and binding precedent of the Board because the 
Government has plainly indicated an intention not to continue 
the prosecution or defense of the appeals and has not met its 
burden of proving the costs disallowed in the COFDs are 
unallowable. 
 
(Id. at 34)  And:   
 
The facts in these appeals are analogous to those in Centron.  
The Government has essentially conceded that it cannot—or 
at least has no intent of trying to— meet its burden of proving 
the Government’s cost disallowance claims asserted in the 
COFDs. 
 
(Id. at 35)  And:   
 
To the extent the Board considers a default judgment 
sustaining the appeals a “sanction” under Rule 16—rather 
than the natural result of failing to defend the appeals or meet 
the Government’s burden of proving the cost disallowance 
claims asserted in the COFDs—it is one that is “necessary to 
the just and expeditious conduct of the appeal” under Rule 16 
and an entirely “appropriate action” under Rule 17. 
 
(Id. at 36) 
 
FAR 31.201-3, Allocates the Burden of Proof to L3 
 
It is true that these are government claims and the government bears an initial 
burden but that burden is not as claimed by L3.  As I explain below the government’s 

30 
burden is to challenge specific costs claimed by the contractor.  In their briefs, neither L3 
nor DCMA consider FAR 31.201-3, Determining reasonableness and how it operates to 
place the burden of proof on L3.  Our interpretation is consistent with that of DCMA’s 
COFDs (SOF ¶¶ 7-9). 
 
FAR Part 31, Contract Cost Principles and Procedures, defines what costs are and 
are not allowable providing the standards applied by DCAA in its audits (SOF ¶¶ 4-5) 
and DCMA in its final decisions (SOF ¶¶ 7-9).  As explained in Boeing North American, 
Inc. v. Roche, 298 F.3d 1274 (Fed. Cir. 2002), this Board is also obligated to follow 
FAR Part 31:   
 
Although a cost may be allocable to a contract, the cost is not 
necessarily allowable.  We have agreed with the general 
proposition that “costs may be assignable and allocable under 
CAS, but not allowable under [FAR].”  United States v. 
Boeing Co., 802 F.2d 1390, 1394 (Fed.Cir.1986).  [Footnote 
omitted] And the FAR makes clear that “[w]hile the total cost 
of a contract includes all costs properly allocable to the 
contract, the allowable costs to the Government are limited to 
those allocable costs which are allowable pursuant to [FAR] 
Part 31 and applicable agency supplements.”  FAR § 31.201–
1(b) (2001). 
 
(Id. at 1280) 
 
FAR 31.201-2, Determining allowability lists five elements required to determine 
if a cost is allowable (SOF ¶ 1).  One of the five elements is reasonableness defined by 
FAR 31.201-3 Determining reasonableness, which includes the following language in 
FAR 31.201-3(a):   
 
No presumption of reasonableness shall be attached to the 
incurrence of costs by a contractor.  If an initial review of the 
facts results in a challenge of a specific cost by the 
contracting officer or the contracting officer’s representative, 
the burden of proof shall be upon the contractor to establish 
that such cost is reasonable. 
 
(SOF ¶ 1) (Emphasis added) 
 
When interpreting a procurement regulation, “we seek an interpretation consistent 
with the plain terms provided; it is not our prerogative to insert additional words or 
phrases to alter an otherwise plain and clear meaning.”  Raytheon Company, ASBCA 
No. 57576 et al., 15-1 BCA ¶36,043 at 176,050.  The language to be interpreted, quoted 
and italicized above, is, “If an initial review of the facts results in a challenge of a 
specific cost by the contracting officer or the contracting officer's representative, the 

31 
burden of proof shall be upon the contractor to establish that such cost is reasonable.”  
This language is unambiguous and has only one reasonable interpretation.  It requires two 
actions by the government:  (1) it must perform an “initial review of the facts,” and (2) 
that review results in a “challenge” to “specific cost[s]” by a contracting officer or 
contracting officer’s representative.  If the government meets this initial burden, “the 
burden of proof shall be upon the contractor to establish that such cost is reasonable.”  
DCMA employed this interpretation in its COFDs (SOF ¶¶ 7-9). 
 
We interpreted FAR 31.201-3(a) in Kellogg Brown & Root, ASBCA, No. 58081, 
17-1 BCA ¶ 36,595, where we recognized that contesting reasonableness “is significant 
because it shifts the burden of proof” to the contractor (id. at 178,240).  We went on to 
hold that a general (blanket) assertion that all costs are unreasonable is insufficient to 
require the contractor to do more to prove reasonableness (id. at 178,250).  I do not have 
such a blanket objection before me in these appeals.  We have DCAA audits that 
challenge specific costs identified as unallowable and DCMA COFDs demanding 
repayment of those unallowable costs (SOF ¶¶ 7-9). 
 
In North American Landscaping, Construction and Dredge, Co. (NALCO) 
ASBCA No. 60235, 18-1 BCA ¶ 37116 a separate concurring decision included the 
following footnote No. 29:   
 
The Federal Acquisition Regulation (FAR) has, on other 
occasions, permitted a CO's suspicions to trigger a 
requirement that a contractor provide more substantiation for 
certain costs.  For example, in FAR 31.201-3, all that is 
necessary to impose upon a contractor the burden of proof of 
demonstrating a particular cost to be reasonable is the CO's 
“challenge”  of that cost after “an initial review of the facts.”  
FAR 31.201-3(a).  Like the DFARS clause we have discussed 
above, this FAR provision does not go into detail about what 
is sufficient for the CO to bring such a challenge. 
 
NALCO, 18-1 BCA ¶ 37116 at 180,659 n.29 (emphasis added).  This footnote, although 
dicta, presents the interpretation of FAR 31.201-3(a) I followed in this case. 
 
In Parsons Evergreene, LLC, ASBCA No. 58634, 18-1 BCA ¶ 37137, the trial 
judge employed the same interpretation of FAR 31.201-3(a) I discussed above that was 
applied in Kellogg Brown & Root, 17-1 BCA ¶ 36,595.  Parsons, 18-1 BCA ¶ 37137 
at 180,790.  A concurring opinion took issue with the trial judge’s conclusion that a 
blanket challenge to costs that failed to challenge specific costs was insufficient to 
require the contractor to do more to prove reasonableness.  The concurring opinion 
concluded, “There was no requirement nor need to follow FAR 31.201 to evaluate this 
claim and thus, we concur in the result but not the analysis” Parsons, 18-1 BCA ¶ 37137 
at 180,821.  Again, I am not faced with such a blanket challenge in this case. 
 

32 
In BAE Systems San Francisco Ship Repair, ASBCA No. 58809, 14-1 BCA ¶ 
35642, citing the Federal Circuit, we held that where the government has challenged 
specific costs, the contractor has the burden of proof to prove the costs it claims are 
reasonable:   
 
Interpreting FAR 31.201 -3(a), the Federal Circuit recently 
affirmed that the contractor has the burden of proof, unaided 
by a presumption of reasonableness, to establish that the costs 
it incurred were reasonable.  Kellogg Brown & Root Services, 
Inc. v. United States, 728 F.3d 1348, 1363 (Fed. Cir. 2013) 
(“It seems that KBR seeks a presumption that it is entitled to 
reimbursement simply because it incurred facilities costs.  It 
is not.”).  This Board has long so held.  See Northrop 
Worldwide Aircraft Services, Inc., ASBCA Nos. 45216, 
45877, 98-1 BCA ¶ 29,654 at 146,934 (citing Northrop 
Worldwide Aircraft Services, Inc., ASBCA No. 47442, 97-1 
BCA ¶ 28,885). 
 
(Id. at 174,534) 
 
L3’s repeated contention that the government has the burden to prove the costs 
challenged by DCAA and DCMA are unallowable is simply wrong.  DCAA’s audits and 
DCMA’s COFDs satisfy the government’s initial burden to conduct an initial review and 
contracting officer challenge of specific costs.  Accordingly, pursuant to FAR 31.201-3(a), 
“the burden of proof shall be upon the contractor [L3] to establish that such cost is 
reasonable” (SOF ¶ 1). 
 
Disputed Material Facts Exist 
 
Thus far I have spent all of my time on the mootness exception and interpreting 
FAR 31.201-3(a) as it relates to the burden of proof.  Such interpretation is a question of 
law.  States Roofing Corp. v. Winter, 587 F.3d 1364 at 1368 (Fed. Cir. 2009).  Questions 
of law are susceptible of resolution by summary judgment.  Dixie Construction Company, 
Inc., ASBCA No. 56880, 10-1 BCA ¶ 34,422 at 169,917.  Although I resolved the 
interpretation / burden of proof questions of law issues, I cannot resolve L3’s motion.  
Placing the burden of proof of allowability on L3 just clears the way for the parties to 
litigate the underlying factual matters in view of the proper allocation of burden of proof.  
DCAA and DCMA contend that the audit challenged costs are unallowable.  L3 contends 
that the statistical analysis used in the DCAA audits is flawed23 and the audit challenged 
costs are allowable.  Whether costs are allowable is a question of fact.  Martin Marietta 
                                              
23 I note that DCMA’s expert, Mr. Arab, identified an error in DCAA’s statistical analysis 
(sample size) that DCAA agreed with and implemented a change (SOF ¶¶ 16-18).  
I do not know if that cured the problem complained of by L3 or not, but L3 is 
entitled to proceed. 

33 
Corp., ASBCA No. 15313, 71-1 BCA ¶ 8644 (Disputes as to whether certain kinds of 
incurred costs (e.g. interest, donations, independent R&D, etc.) are allowable under the 
contract are disputes concerning a question of fact arising under the contract provisions . . 
. .).  Accordingly, I have disputed material facts that cannot be resolved by summary 
judgment. 
 
L3 is not Entitled to Summary Judgment that its Challenged Costs are Allowable 
 
Because the question of allowability of discrete costs involves disputed material 
facts, I would deny L3’s motion and allow the litigation to proceed.   
 
CONCLUSION 
 
Based on the above, I would deny DCMA’s motion to dismiss for mootness and 
L3’s motion asking the Board to decide that its challenged costs are allowable.  I would 
allow the appeals to proceed. 
 
Dated:  March 1, 2021 
 
 
 
 
 
 
 
 
 
 
 
 
 
I certify that the foregoing is a true copy of the Opinion and Decision of the 
Armed Services Board of Contract Appeals in ASBCA Nos. 61811, 61813, 61814, 
Appeals of L3 Technologies, Inc., rendered in conformance with the Board’s Charter. 
 
Dated:  March 2, 2021 
 
 
 
 
CRAIG S. CLARKE 
Administrative Judge 
Armed Services Board 
of Contract Appeals 
 
 
 
PAULLA K. GATES-LEWIS 
Recorder, Armed Services 
Board of Contract Appeals