MOTION FOR SUMMARY RELIEF DENIED:  December 14, 2010 
CBCA 337, 338, 339, 978 
THE BOEING COMPANY, SUCCESSOR-IN-INTEREST
 
OF ROCKWELL INTERNATIONAL CORPORATION,
 
Appellant, 
v. 
DEPARTMENT OF ENERGY, 
Respondent. 
Richard J. Ney and S. Jean Kim of Chadbourne & Parke LLP, Los Angeles, CA, 
counsel for Appellant. 
Brady L. Jones III, and Kaniah Konkoly-Thege, Office of Legal Services, Department 
of Energy, Cincinnati, OH, counsel for Respondent. 
Before Board Judges GILMORE , BORWICK , and McCANN . 
McCANN, Board Judge. 
The Boeing Company, successor-in-interest of Rockwell International Corporation 
(Rockwell) seeks to recover, as allowable costs under the contract, the costs of defending 
itself in United States ex rel. Stone v. Rockwell International Corp ., No. 89 C-1154 (D. Colo. 
1989) ( Stone ) on those counts and claims where it was found both liable and not liable 
(common costs).  In The Boeing Co. v. Department of Energy, CBCA 337, et al., 09-BCA 
¶ 34,026 (2008) (Boeing), we found that Rockwell was entitled to its defense costs in Stone 
where those costs were expended entirely on those counts and claims where it was found not 
liable. We also found that it was not entitled to its defense costs where those costs were 

        
               
 
          
          
           
             
            
                
          
             
          
       
           
      
  
            
             
            
      
     
       
   
      
      
2 CBCA 337, 338, 339, 978 
expended entirely on those counts and claims where it was found liable. Rockwell has filed 
a motion for summary relief on common costs. For the following reasons, we deny that 
motion. 
Uncontested Facts1 
1. Rockwell and the Department of Energy (DOE) were parties to management 
and operating (M&O) contract DE-AC04-76DP03533, as amended, for the operation and 
maintenance of the Rocky Flats Nuclear Weapons Plant. Appellant’s Uncontested Facts 
(AUF) 1. 
2 Modification M087 covered performance of the contract from January 1, 1986, 
through December 31, 1988. AUF 2. Modification M097 added clause 54(e)(32), 
hereinafter referred to as clause (e)(32), to the contract effective January 1, 1987. AUF 4. 
This clause provides that the following costs are not allowable: 
(32) Costs incurred in defense of any civil or criminal fraud proceeding or 
similar proceeding (including filing of any false certification) brought by the 
Government where the Contractor, its agents or employees, is found liable or 
has pleaded nolo contendere to a charge of fraud or similar proceeding 
(including filing of a false certification). 
AUF 3. 
2. The Department of Defense (DOD) Authorization Act of 1986, Pub. L. No. 99­
145, 1985 Stat. 1160, was enacted by Congress on November 8, 1985. Respondent’s 
Supplemental Statement of Uncontested Facts (RUF) 5. Section 1534 of the DOD 
Authorization Act of 1986 reads as follows: 
COSTS NOT ALLOWED UNDER COVERED CONTRACTS 
(a) IN GENERAL. -- The following costs are not allowable under a covered 
contract: 
. . . . 
1 These facts are taken verbatim from our earlier decision in Boeing. With 
regard to footnote 4, the Board is unaware of the current status of the proceeding involving 
count 6.  That status is not relevant to this decision.  
2 AUF refers to the uncontested facts submitted in  Boeing. 

             
          
           
            
 
   
            
           
         
  
            
            
      
     
              
                 
          
             
             
      
            
         
            
            
   
       
            
3 CBCA 337, 338, 339, 978 
(3) Costs incurred in defense of any civil or criminal fraud proceeding or 
similar proceeding (including filing of any false certification) brought by the 
United States where the contractor is found liable or has pleaded nolo 
contendere to a charge of fraud or similar proceeding (including filing of a 
false certification). 
. . . . 
(c) DEFINITION. -- In this section, “covered contract” means a contract for 
an amount more than $100,000 entered into by the Secretary of Energy 
obligating funds appropriated for national security programs of the Department 
of Energy. 
(d) EFFECTIVE DATE. -- Subsection (a) shall apply with respect to costs 
incurred under a covered contract on or after 30 days after the regulations 
required by subsection (b) are issued.
3 
42 U.S.C. § 7256a (2000). 
3. On January 14, 1987, DOE issued a final rule implementing section 1534 of the 
DOD Authorization Act of 1986. 52 Fed. Reg. 1602 (Jan. 14, 1987). This rule also added 
section 970.3102-20 to the Department of Energy Acquisition Regulations (DEAR), which 
implemented section 1534(a) of the DOD Authorization Act of 1986. It states: 
(b) Costs incurred in connection with defense of any (1) criminal or civil 
investigation, grand jury proceeding, or prosecution, (2) civil litigation, or (3) 
administrative proceedings . . . are unallowable when the charges which are the 
subject of the investigation, proceedings, or prosecution, involve fraud or 
similar offenses (including filing of a false certification) on the part of the 
contractor, its agents or employees, and result in conviction . . . . 
. . . . 
(d)  Costs which may be unallowable under this subsection, including directly 
associated costs, shall be differentiated and accounted for by the contractor so 
as to be separately identifiable. During the pendency of any proceeding or 
The parties agree that the subject contract is a covered contract. 3 

          
      
   
             
              
           
             
               
              
           
              
                
    
                 
              
                 
                 
                   
      
         
          
                
         
          
     
             
                
             
          
         
     
        
4 CBCA 337, 338, 339, 978 
investigation covered by paragraph (b) of this section, the Contracting Officer 
should generally withhold payment of such costs. 
52 Fed. Reg. 1609-10. 
4. In July 1989, James Stone brought an action under the False Claims Act (FCA) 
in the United States District Court for the District of Colorado, alleging that Rockwell had 
misrepresented or failed to disclose certain environmental matters at Rocky Flats. AUF 36. 
The Department of Justice initially declined to intervene in Stone , but sought leave to 
intervene on November 14, 1995. AUF 37, see Declaration of Richard J. Ney (Dec. 13, 
2006), Exhibit 3. This request was granted on November 19, 1996. AUF 38. 
5. In December 1996, the Government and Mr. Stone filed an amended complaint 
alleging violations of the FCA (count 1), common law fraud (count 2), breach of contract 
(count 3), payment by mistake (count 4), and unjust enrichment (count 5). AUF 39. 
4 After 
a jury trial, the district court entered judgment in May 1999, and amended it in June 1999 to 
correct ministerial errors. AUF 40. The jury found Rockwell liable on three of the ten alleged 
FCA claims in count 1. These three claims related to Rockwell’s performance in connection 
with three award fee periods. AUF 45. Rockwell was found not to be liable in connection 
with the other seven award fee periods in count 1. Id. Rockwell prevailed entirely on counts 
2, 3, 4, and 5. AUF 41. The Court of Appeals for the Tenth Circuit affirmed the district 
court’s decision. AUF 42, 43. 
6. DOE reimbursed Rockwell for all Stone defense costs ($4,060,669.03) that 
Rockwell had incurred up to the date the Government filed its motion for leave to intervene 
in Stone (November 14, 1995). AUF 46. All defense costs incurred after November 13, 1995, 
were deemed to be unallowable. AUF 47. 
7. In May 2005, Boeing, Rockwell’s successor in interest, requested a contracting 
officer’s final decision on its claim in the amount of $11,344,081.14 for unreimbursed costs 
that Rockwell had incurred in defending itself in Stone from November 14, 1995, to 
December 31, 2004. AUF 50; Complaint ¶ 6. On September 30, 2005, the contracting officer 
denied Rockwell’s claim in its entirety and demanded, in addition, that Rockwell pay the 
Government $4,060,669.03 of previously reimbursed Stone defense costs plus interest of 
$2,522,746.50 as of March 15, 2005. AUF 51. 
4 The amended complaint also included a separate count 6 for alleged FCA 
violations asserted by Mr. Stone alone. Count 6 has been severed and has not yet been tried. 

     
       
      
       
       
      
       
      
     
   
      
       
        
  
     
     
     
      
       
  
   
      
     
   
 
       
     
5 CBCA 337, 338, 339, 978 
Discussion 
Summary relief is appropriate where there is no genuine issue of material fact and the 
moving party is entitled to judgment as a matter of law. Anderson v. Liberty Lobby, Inc., 477 
U.S. 242, 247 (1986). “Only disputes over facts that might affect the outcome of the suit 
under governing law will properly preclude the entry of summary judgment.” Id. at 248. 
Any doubt on whether summary relief is appropriate is to be resolved against the moving 
party.  Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). 
In Boeing, 09-BCA ¶ 34,026 (2008), this Board held that Rockwell was entitled under 
the contract to its costs of defending itself in the Stone case where those costs were expended 
solely in defense of those counts and claims where Rockwell was found not liable. We found 
that clause (e)(32) did not bar such recovery. We also found that Rockwell was not entitled 
under the contract (clause (e)(32)) to its defense costs where it could be shown that those 
costs were expended solely in defense of those claims and counts where it was found liable. 
The Board made no ruling on “common costs,” those costs Rockwell incurred in defending 
itself where the result was that it was held to be both liable and not liable. The Board did not 
rule on this issue because parties had not submitted briefs on that issue.
5 
Respondent appealed the Board’s decision to the Court of Appeals for the Federal 
Circuit. The Federal Circuit returned the case to the Board without a decision, indicating that 
the case was not yet final because the issue of the allowability of common costs had not been 
decided. Subsequently, Rockwell filed a motion for summary relief claiming entitlement to 
common costs of defense in the Stone case. The parties have briefed the issue and we herein 
issue our decision.  We hold that Rockwell is not entitled to recover as allowable costs any 
of its defense costs incurred in the Stone case that are common costs. 
The issue here again, as in our previous decision, is the proper interpretation and effect 
of clause (e)(32) of the contract. The parties do not dispute that Rockwell is entitled to all 
its defense costs except those that are specifically disallowed by this clause, if any.  
DOE takes the position that this clause disallows all defense costs in the Stone case 
because Rockwell was found liable under the False Claims Act (FCA). It claims that, 
because of this finding of liability, clause (e)(32) makes all costs in Stone, common or not, 
unallowable. DOE disagrees with the Board’s decision in Boeing, and has set forth 
essentially the same arguments that it had previously set forth in Boeing. 
5 The issue of what particular Stone defense costs fall into which of these three 
categories is not in issue in this decision. 

    
      
  
       
    
       
    
    
     
    
  
     
   
        
    
          
  
       
     
     
     
     
        
   
 
      
        
         
      
   
         
    
6 CBCA 337, 338, 339, 978 
Rockwell, on the other hand, contends that it prevailed overwhelmingly in the Stone 
case, and, therefore, it is entitled to recover all of its defense costs. In the alternative, 
Rockwell contends that its common defense costs should, at the very least, be apportioned, 
allowing it to recover somewhere between eighty and ninety-nine percent of the costs. 
Rockwell points to a number of instances, many under the Equal Access to Justice Act 
(EAJA), 5 U.S.C. § 504 (2006), where attorney fees and costs have been apportioned 
between parties, where the outcome of a litigation demonstrates split results, not entirely in 
favor of one party or the other. Rockwell contends that this is such a case, where the contract 
specifically allows some of the defense costs and specifically disallows others. Specifically, 
Rockwell points to Hensley v. Eckerhart, 461 U.S. 424 (1983), where the Court indicated 
that, in determining the proper amount of attorney fees in a case, a court must consider the 
degree of success obtained. 424 U.S. at 436. Thus, Rockwell argues that it should recover 
all of its defense costs, or at least an amount in proportion to its success.
6 
Unfortunately, the argument that this case is similar to EAJA cases and other cases in 
which attorney fees can be awarded is not well taken. The issue here is not the extent to 
which Rockwell prevailed. The issue here is what is the effect of clause (e)(32) on the costs 
Rockwell expended in defending itself in the Stone case where it both prevailed and was 
found liable. While it is true that the contract does cover most defense costs, clause (e)(32) 
is a specific exception to that coverage. We see nothing in clause (e)(32), or the DOD 
Authorization Act of 1986 from whence it came, indicating that the Government must prevail 
entirely, or even to a substantial degree, in order for all defense costs to be disallowed. All 
that is required is a finding of liability. Defense costs are simply not allowable when 
contractors are found liable. 
As we have stated, clause (e)(32) is taken virtually word for word from the DOD 
Authorization Act of 1986, and codified at 42 U.S.C. § 7256a (2000). There is nothing in 
the statute or the legislative history that indicates that there is any leeway here for the relative 
success of the parties.  We do not believe that it is reasonable to interpret this clause or the 
underlying statute as intending to set up a situation where some of the defense costs could 
be recovered even though a contractor is ultimately found liable. Such an interpretation 
could lead to unintended litigation over the allowability of defense costs in many cases 
dealing with contractor fraud and FCA violations. The simple fact that the Government did 
A persuasive argument can be made that Rockwell prevailed overwhelmingly 
in the Stone case. The jury awarded damages of $1,390,775.80 on the three FCA claims in 
count 1, where Rockwell was found liable. The Government had sought damages in excess 
of $187 million. 
6 

    
    
        
         
      
      
    
        
  
      
          
     
       
  
  
      
       
     
       
       
       
      
    
     
      
      
        
     
      
7 CBCA 337, 338, 339, 978 
not prevail on all of the counts and claims brought against a contractor does not entitle a 
contractor to defense costs on the counts and claims where it was successful in its defense. 
As in this case, and presumably others, a core set of facts can constitute any number 
of different alleged violations of law. Here, Counts 1 through 5 all involved issues relating 
to pondcrete and saltcrete. 
7 Rockwell’s Uncontested Facts (RUF) 27 and 28. 8 Those core 
facts all supported to some degree alleged claims for FCA violations, common law fraud, 
breach of contract, payment by mistake, and unjust enrichment. When the Government 
brings a case, it cannot know in advance just how successful it will be. The Government 
should not have the incentive not to bring a charge or claim because it would have to pay 
attorney fees if it does not prevail on that charge or claim.  There should be no incentive to 
bring lesser and easier to prove charges, rather than more serious and harder to prove charges. 
We do not believe that Congress, in passing the 
DOD Authorization Act of 1986, which led 
to clause (e)(32), intended such a result. 
Contrary to Rockwell’s assertions, we are not dealing here with a situation that is 
analogous to a situation involving a fee shifting statute, such as the EAJA. Simply because 
DOE, under the contract, agreed to treat most defense costs as allowable costs but certain 
other defense costs as not allowable, does not make this situation analogous, as Rockwell 
seems to contend. The clause and the statute are clear. If the contractor is found liable, the 
defense costs are not recoverable as allowable costs. 
Our holding here is not inconsistent with our previous decision in Boeing. In our 
previous decision we found that Rockwell was entitled to its defense costs expended where 
those costs related solely to claims and counts where it had prevailed. We found that the term 
“proceeding,” as used in clause (e)(32), did not necessarily apply to the entire Stone case, but 
could apply only to separate parts of Stone. Specifically, we found that where Rockwell 
could show that its defense costs pertained only to claims and counts where it prevailed, that 
that was in essence a separate “proceeding.” This holding is consistent with Hensley v. 
Eckerhart, where the Court held in a suit claiming attorney fees that “[t]he congressional 
intent to limit [attorney fee] awards to prevailing parties requires that . . . unrelated claims be 
treated as if they had been raised in separate lawsuits. . . .” 461 U.S. at 435. Accordingly, 
to the extent that Rockwell could show that its efforts pertained only to counts and claims 
7 Pondcrete is mixture of sludge from solar ponds and cement. Saltcrete is a 
mixture of cement, salts, and brine from liquid waste treatment processes. 
8 RUF refers to Rockwell’s uncontested facts submitted in support of its motion 
for summary relief on common costs. 

       
            
             
               
  
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8 CBCA 337, 338, 339, 978 
where it had prevailed, those efforts could be considered to have been expended in a different 
and separate suit or proceeding. 
Decision 
Appellant’s motion for summary relief is DENIED . Appellant may not recover, as 
allowable costs, its defense costs in Stone which are “common” costs, specifically, those costs 
expended in defense of counts and claims where Rockwell was found to be both liable and 
not liable. 
R. ANTHONY McCANN 
Board Jud ge 
We concur: 
BERYL S. GILMORE ANTHONY S. BORWICK 
Board Judge Board Judge