ARMED SERVICES BOARD OF CONTRACTAPPEALS Appeals of

-- Raytheon Company Under ContractNo. N00024-04-C-6101
APPEARANCES FORTHE APPELLANT: ) ) ) ) )

APPEARANCES FORTHE GOVERNMENT: ASBCA Nos. 57743, 57798, 58280

Karen L. Manos, Esq. John W.F. Chesley, Esq.

Gibson, Dunn & CrutcherLLP Washington, DC
E. Michael Chiaparas, Esq.

DCMA ChiefTrial Attorney Stephen R. Dooley, Esq.

Senior Trial Attorney Alexander M. Healy, Esq. Kathleen P. Malone, Esq.

Trial Attorneys Defense Contract ManagementAgency Boston, MA OPINION BYADMINISTRATIVE JUDGE SCOTT ON THE PARTIES' MOTIONS TO STRIKE
InASBCANo. 57443, at issue, Raytheon Company (Raytheon) appealed under the ContractDisputes Act, 41 U.S.C. §§ 7101-7109, from the Defense Contract ManagementAgency's (DCMA's) corporate administrative contracting officer's (CACO's) final decision demanding the return ofgovernmentpayments ofallegedly expressly unallowable costs and assessingpenalties and interest against Raytheon for includingthe costs in its corporate incurred costproposal for 2004 (2004 Corporate Proposal). In addition to cost allowability questions, the appeal focuses upon Federal Acquisition Regulation (FAR) 42.709-5(c)'spenalty waiverprovisions. 1

1 In the other captioned appeals, Raytheon was assessedpenalties and interest for including alleged expressly unallowable costs in the incurred costproposals ofits IntegratedDefense Systems business segment for 2004 and 2005. It determined notto contestthe non-waiver ofpenalties, but it continues to advocate that the costs in question are not expressly unallowable and thus not subject to penalties (app. pre-hearing br. at 9 n.4).The Board held a hearing on entitlement during which appellant moved to strike certain testimony by the CACO and related evidence on the groundthat they contradicted apre-hearing interrogatory response by the government. The parties briefed the motion afterthe hearing and, at appellant's request, the Boardheard oral argument. 2 In its response to appellant's motion, the government movedto strike certain materials profferedby appellant in support ofits motion, describedbelow. STATEMENT OF FACTS FORPURPOSES OF THE MOTIONS TO STRIKE Appellant's first discovery requests in question, dated 17 February 2012, asked the government to produce all documents in connectionwith its decision to impose penalties regarding the costs included in Raytheon's 2004 Corporate Proposal (app. mot., ex. 1at 41, Request No. 7). Interrogatories included the following: Interrogatory No. 12 asked for the identification ofall prior government audits or reviews related to Raytheon Corporate's purported noncompliance with Cost Accounting Standard (CAS) 405 (Accounting for Unallowable Costs), from 1January 2002 through 1September2005 (app. mot. ex. 1at 16). On 16 May 2012, the government responded: The Government is currently aware ofthe following Audit Reports which specifically concern Raytheon Corporate's compliance with CAS 405 between January 1, 2002 and September 1, 2005: Audit Report No. 2671-2006A19200008 (dated October 30, 2006); and Audit Report No. 2671-2007A19200002 (dated September 24, 2007). (App. supp. R4, tab 682 at 33) The government describes the referenced 24 September 2007 report, which it included in its supplemental Rule 4 file (tab 285), as the "Incentive Compensation CAS 405 Audit Report" (gov't opp'n at 23, 25). · Interrogatory No. 20 asked:

a. Doyou agree that for the period ofJanuary 1, 2004 through May 31, 2005, Raytheon's corporate finance function had appropriate policies and personnel training and an internal control and review system thatprovided assurance that unallowable costs subjecttopenalties were precluded

2Atthe oral argument the Board statedthat it would include its decision on the motion to strike as part ofits post-hearing decision. However, it is now apparent that it will be more efficient, and will not delay the Board'spost-hearing decision, ifthe Board decides the motionto strike first.

2from being included in its indirect incurred cost rate proposals? (App. mot., ex. I at 20) Interrogatory No. 23 asked:

a. Explain under what circumstances a contractor may include expressly unallowable costs in its final indirect cost rate proposals, but obtain a waiver under FAR42.709-5(c). b. State with specificity each and every fact, factor, criteria, or otherpiece ofinformation on whichRespondent relies in assessing a contractor's request for a waiver under FAR42.709-5(c). (App. mot., ex. I at 22) In response to a government objection, by letter dated 15 June 2012, appellant stated: Raytheon clarifies this interrogatory for the Government

.... [E]xplain why a waiver was not granted to Raytheon under FAR42.709-5(c) for each cost in dispute in this litigation. Raytheon further requests that the Government respond to subpar[t] (b)

...in full. (App. mot., ex. 2 at 15) On 16 August 2012, the government responded to appellant's restatement of Interrogatory No. 23(a) as follows in relevant part: The Government construes Raytheon's revised Interrogatory No. 23 to seek information concerning the factors taken into accountby the relevant contracting officers [COs] when considering whether it was appropriate to waive the penalties applicable to the Corporate

...CY 2004 Indirect Cost Proposa[l]. Our supplemental response identifies factors that the [COs] took into account when considering whetherwaiver ofthe penalties applicable to the CY 2004 Proposa[l] was appropriate; it does not necessarily constitute a description of the Government's contentions in these appeals or an exclusive list ofall possible bases that could supportthe

3determination that Raytheon is not entitled to a waiver ofthe penalties applicable to its CY 2004 Proposa[l]. (App. supp. R4, tab 690 at 2-3) The government discussed factors that CACO Dowd had considered in concludingthat Raytheon would not be entitled to a waiver under FAR42.709-S(c), including: "Mr. Dowd considered Raytheon's recurring inclusion of these unallowable costs in its proposals as indicative ofsystematic and continuing deficiencies in its internal controls and a lack ofproper care" (id. at 6). Regarding Interrogatory No. 23(b), the government stated inrelevant part: In deciding to assess penalties against Raytheon and in consideration ofany request for waiver made by Raytheon, Mr. Dowd

...relied upon Raytheon Corporate's

...various Final Certified Incurred Cost Proposals that included unallowable costs, the various DCAA [Defense ContractAuditAgency] Audit Reports which determined that Raytheon had included unallowable costs in its Proposals, DCAAAuditReports finding that Raytheon's internal controls were deficient in some respects, documentation and correspondence concerning the negotiation ofRaytheon's Certified Incurred Cost Proposals

.... (App. supp. R4, tab 690 at 8) On 3 October 2012 appellant deposed CACO Dowd, who testified:
A. Yes, We have several CAS non-compliances, you know, that we are dealing with... So with those things in place, like I say, I would have to say we're working those non-compliances and inadequate system issues on a fairly regular basis.

Q. And under what circumstances could it be inadvertent? A. Again, in my mind, I have to take a look at the entire situation. Again, we have the system issues, we have a number ofCAS non-compliances, including a CAS 405

4non-compliance for 2006, so in my mind I couldn't say it was inadvertent.

Q. And do you look at CAS 405-CAS noncompliances, generally?
A. Yes. Q. Andwith regard to expressly unallowable costs, which CAS provisionwould you look at to determine whetherthere are relevant non-compliances in your decision to waive penalties.

A. I would consider other outstanding CAS 405 non-compliances

.... Q. And so for expressly unallowable costs, so you would look at CAS 405 non-compliances, correct?
A. Correct.

Q. So is it true that any outstanding CAS noncompliances would be considered relevantto your decision, whetherto waive apenalty on an expressly unallowable costs?
A. Yes.

Q. And ifa contractorhadto satisfy you, ifin 2004, Raytheon soughtto satisfy you as to the fact that it deserved a penalty waiver, whatkind ofshowing wouldRaytheon need to make? A. I don'tthink they could in 2004, because as we said before, we had issues with their systems, as well as we had issues with, you know, there was a CAS 405

5non-compliance, and in regard to the 2006 cost and we had other CAS non-compliances outstanding as well.

A. Ithink ifwe had all ofour systems, you know, were adequate, we had squared away all ofour CAS non-compliances, specifically the CAS 405 non-compliance, ifall ofthose had been taken care of, you know, that would, you know, lead a long way towards me feeling more likely to waive penalties, but again, I would have to consider, you know, the specific circumstances, and stuffat the time

.... (Gov't opp'n, ex. G-1 at 28, 35, 43-44, 229-31) CACO Dowd further testified in his deposition, in response to questioning whether CAS non-compliances listed in an audit report dated 27 April 2006 were considered in his decision not to waivepenalties:
Iwould have considered the outstanding CAS 405 non-compliances and issues with CAS that were onthe streets at the time. I mean that would have been part ofmy overall decision notto waive penalties. (Gov't opp'n, ex. G-1 at 239) On 4 October 2012 appellant deposed Rodger Christiansen, DCMA Raytheon's corporate contract specialist and DCMA's chiefnegotiator for Raytheon's 2004 Corporate Proposal, who testifiedthathe had drafted the CO's final decision (COFD) at issue (gov't opp'n at 17). He further testified: Q. Butyetyou considered this subsequent CAS 405 non-compliance? A. That's correct. Q. Andwould you say that the subsequent CAS 405 non-compliance was determinative ofyour decision to impose penalties? A. Itwas one ofthe factors considered to assess the penalty.

6Q. What otherfactors were considered in assessing penalties in 2004? A. We also had on the street at the time and another CAS 405 on the incentive comp.

Q. Incentive comp, there were no incentive comp issues

- by incentive comp you mean what exactly? A. Raytheon's incentive compensationplan for bonuses and performance bonuses and so forth. I am not familiar. I know that there has been some sort ofdiscussions on differences and equivalents on other areas, butthe specifics ofthat audit report I am not familiar with.

Q. Were there any otherfactors? A. Not to my knowledge. There couldhave been. My recollection is the principal one was the CAS 405 report. Q. So to recap, I asked you for thefactors, the reasons whyyou issued penaltiesin the 2004 case andyou said therewas a CAS 405 non-compliance reportfor the calendaryear 2006 year issue that related to some ofthe costs thatwere included in 2004, for example, the recruiting reminder items? A. That was one example, yes. Q. You mentioned therewas another CAS 405 non-compliance reportthatwas issued related to incentive compensation costs? A. That's correct. (Gov't opp'n, ex. G-2 at 49-52)

7Appellant's second set ofdiscovery requests, dated 12 November 2012, asked for all documents, including audit reports, COFDs, CAS noncompliance findings, CAS 405 noncompliances and DCAA indirect cost/other direct cost audit reports relied upon by DCMA (including Messrs. Dowd or Christiansen) in DCMA's decision to impose penalties on Raytheon's 2004 Corporate Proposal (app. mot., ex. 3 at 16, Requests Nos. 53, 54). It also asked for all documents reflecting the reasons DCMA imposed penalties on the proposal (id. at 18, Request No. 69).
On 20 February 2013, the government agreed to identify the audit reports CACO Dowdhad considered in reaching his decisionthat Raytheon was not entitledto a penalty waiver (see app. mot., ex. 5 at 10; app. supp. R4, tab 701at13).
In its 15 April 2013 third supplemental response to appellant's interrogatories, the government statedregarding Interrogatory No. 20(a): The Government answers sub-part (a) to this interrogatory in the negative. Atthe time Mr. Dowd issued his final decision, there were several DCAA audit reports in existencethat identifiedproblems in Raytheon's policies, personnel training, or internal control and review system related to excluding unallowable costs subject to penalty from its Corporate proposals. These includedthe following DCAA audit reports: [eight reports listed].
In addition, Mr. Dowdhadrecently issueda final decision datedJanuary 10, 2011, in which hefound that Raytheon hadincludedexpressly unallowable incentive compensation in its Corporateproposals since CY2002. Subsequently, shortly after the May 2011final decision at issue in this case, Mr. Dowdissuedanother final decisionfinding thatRaytheon hadincludedcertain expressly unallowable costs associatedwith Raytheon's "Long Term Performance Plan" in its Corporateproposals since CY2004. These expressly unallowable costs included "dividendequivalent"payments, whichRaytheon did not contest. These additional instances of Raytheon including expressly unallowable costs in its Corporate proposals also indicated that its policies, personnel training, and/or internal control and review system related to excluding unallowable costs were lacking.

8(App. supp. R4, tab 701at6-7) (Emphasis added) The eight audit reports the government listed did not includethe two audit reports at issue in appellant's motionto strike.
The government stated in relevant partregarding Interrogatory No. 23:
The Government's supplemental response to Interrogatory No. 23 is given in accordance with Raytheon's restatement ofsubpart (a), which requests an explanation for why Raytheon was not granted a waiver ofpenalties under FAR42.709-5(c) with respect to the specific costs in dispute in ASBCANo[]. 57743

.... The Government construed Raytheon's revised Interrogatory No. 23 to seek information concerning the factors taken into account by the relevant [COs] when considering whether it was appropriate to waive the penalties applicable to the Corporate and IDS CY 2004 Indirect CostProposa[l]. Our supplemental responses identify factors that the [CO] took into account when considering whether waiver ofthe penalties applicable to the CY2004 Proposa[l] was appropriate; they do not necessarily constitute a description ofthe Government's contentions in these appeals or an exclusive list ofall possible bases that could supportthe determination that Raytheon is not entitled to a waiver ofthe penalties applicable to its CY2004 Proposa[l]. (App. supp. R4, tab 701 at 12) The government identifiedthe same eight audit reports it had listed in response to Interrogatory No. 20(a). The government does not now dispute appellant's contentionthatthey "reportedupon alleged events and conditions that occurred in 2006 and later," whichpost-dated the 2004 Corporate Proposal in question (app. mot. at 5-6).
Inthe government'spre-hearingbrief, dated 25 April 2013, over a yearbefore the October 2014 hearing, it repeated its response to Interrogatory No. 20(a). It stated that, priorto the COFD at issue, Mr. Dowdhad recently issued a COFD that Raytheon had included expressly unallowable incentive compensation in its Corporate proposals since 2002 and that, shortly afterthe COFD at issue, he had issued another COFD finding that Raytheon had included expressly unallowable costs in its Corporateproposals since 2004, including dividend equivalents payments. (Gov'tpre-hearing br. at 76-77) The government alleges, without contradiction, that, "since 2004, there have been only two CAS 405 noncompliances thatresulted in CACO Dowd issuing COFDs against Raytheon Corporate," apparently referring to the decisions identified in its response to interrogatory No. 20(a) and in its pre-hearing brief(gov't opp'n at 20). It states that these

9CAS 405 final decisions found that "incentive compensation" and "dividend equivalents" costs included in Raytheon's yearly incurred cost proposals were "expressly unallowable" (id.). The government also asserts, without contradiction, that Raytheon had copies ofthe two auditreports at issue in appellant's motion to strike, which were addressed in the two COFDs (gov't opp'n at 4).
On 6 March 2014 appellant filed aMotion In Limine to Exclude Evidence of Alleged Post-Certification Control Deficiencies. It asked the Board "to exclude all documents and testimony, from the Rule 4 File and at the hearing, concerning alleged control deficiencies at Raytheon post-dating the May 31, 2005 submission ofRaytheon's [2004 Corporate Proposal]" (gov't opp'n, ex. G-3 at 1). The motion covered 11 audit reports, including the Incentive Compensation CAS 405 Audit Report referred to above, which is the subject ofother appeals currently before the Board (supp. R4, tab 285; gov't opp'n at 25, ex. G-3 at 4-5, ex. G-5 at 7). Appellant acknowledged that this audit report and two others in the government's supplemental Rule 4 file, which it had inadvertently included as part ofits motion in limine, concerned 2004 andprioryear costs, but it advocated excluding them on other grounds. (Gov't opp'n, ex. G-5 at 4 n.2) The government's 28 March 2014 response to appellant's motion in limine stated:


### Mr. Dowd also considered other internal control deficiencies ofwhichhe was aware, including Raytheon's inclusion ofseveral other expressly unallowable costs in its proposals on arecurring basis. [Citations omitted]

Curiously, we note that several ofthe "postcertification" CAS noncompliances cited in Raytheon's motion and considered by the CACO actually concern noncompliances that occurred during and afterFY2004, including during theperiod (January

- June 2005), when Raytheon was preparing its FY2004 incurred costproposal, and were also included in thatproposal. For example, Mr. Dowdwas aware when he determinedthata waiver was notappropriate that, since at least 2002, Raytheon hadbeen including expressly unallowable incentive compensation costs for unallowable activity in itsproposals. He was also aware

that, since 2004, Raytheon hadbeen including expressly unallowable "dividendequivalentpayments[") (see FAR 31.205-6(i)(2)) in itsproposals. Raytheon has accepted 

### Mr. Dowd's CAS 405 noncompliance determination and has

10paid the penalties on these dividend equivalentpayments, so there need be no time-consuming debate about them. There are more examples. [Footnote omitted] (Gov'tresp. at 5, 8) (Emphasis added) Appellant replied in support ofits motion in limine that CACO Dowd's deposition testimony demonstrated with "crystal clarity" that his "refusal to waivepenalties was premised upon alleged 'CAS non-compliances outstanding' at the time ofhis 2011 COFD, in particular a report pertaining to '2006 costs"' (gov't opp'n, ex. G-5 at 3).
In a teleconference on 29 April 2014, oral argument was held on Raytheon's motion in limine to exclude evidence ofalleged control deficiencies that occurred after it submitted its Corporate 2004 Proposal on 31 May 2005, and on a government motion in limine to exclude the evidence ofappellant's proffered expert, Darrell Oyer. Contemporaneously, appellantkept a record ofthe oral argument that is essentially undisputed in relevant respects (app. reply, ex. 15). During the argument appellant specifiedthe documents that its motion was intendedto cover, which did not include the Incentive Compensation CAS 405 Audit Report and other documents originally included by mistake (id. at 8 and see above). Appellant's record states that: Judge Melnick [asked] whetherDowd considered any of these documents in making his decision not to waive the penalties at issue, and [appellant's counsel] responded that he did, clarifyingthat he specifically referenced Tab 292, the CAS 405 noncompliance relating to 2006 costs. (Id. at 9) Judge Melnick denied both motions (Bd. corr., 1May 2014 memo. of conference call) 3
On 21 October 2014, at the hearing, CACO Dowdtestified in response to a question by government counsel as follows in relevant part: Q. Can you tell me, 

### Mr. Dowd, in considering whether Raytheon could satisfy you that the [waiver criteria in FAR 42.709-5(c)(l)] are met, what factors did you consider?
A.

3 The appeal was reassignedto Judge Cheryl Scottpriorto the hearing.

11Secondly, we hadtwo [CAS} 405 noncompliances out there thatwe were addressing, thefirst one being it wasfor dividend[equivalents}. You know Raytheon concededthat and ultimatelypaid the government...for dividend equivalents. I believe itstartedroughly in the 2006time frameforwardandIwantto say that it was for the 2004 to 2006long-term conformance plan I believe is how Raytheon identifies it.
But anyway, I issued a demand letter to them for those dividend equivalents and Raytheon paid them. So, that concerned me. We have another CAS405 that issued in the same time framefor whatI called incentive compensation. It was Raytheon pulled out the labor and some fringe costs for this unallowable activity thatthey pulled out oftheir incurred cost submission butthey didn'tpull outthe associated incentive compensation associated with that. (Tr. 6/252-53) (Emphasis added) Atthis point appellant movedto strike and oral argument ensued.
Atthe time oforal argument, while not entirely clear, government counsel apparently thought that the Incentive Compensation CAS 405 auditreport hadbeen among the audit reports listed in the government's supplemental interrogatory responses and that only one audit report hadbeen omitted. Counsel believedthat it had been omitted becausethere had been no CAS 405 audit report onthe dividend equivalents issue. Rather a CAS 415 (Accounting for the Cost ofDeferred Compensation) audit had been "dispositioned" (tr. 6/256, 263), and the government's concerns later evolved into the CAS 405 matters addressed in the COFD on dividend equivalents, issued on 2 June 2011. (See tr. 6/255-57, 263-64; gov't opp'n at 31-32) Post-hearing briefing on appellant's motion to strike and the additional oral argument ensued. Appellant moves to strike from the hearing record and post-hearing briefing: CACO Dowd'shearing testimony at transcript 6/252, line 6, through transcript 61279, line 3; transcript 7/5, line 4 through transcript 7/48, line 4; ex. A-20 (5 July 2011 letter from Raytheon to CACO Dowd concerning, inter alia, his COFD on dividend equivalents, andprofferingpayment); appellant's expert Oyer's hearing testimony at transcript 10/67, line 4, through transcript 10/78, line 4; and ex. G-3 (the latter COFD).

12The government moves to strike appellant's inclusion ofexcerpts from otherwise sealed materials in a Court ofFederal Claims proceeding, unrelated to the instant appeal, in which current government counsel were not involved, that include statements by the judge concerningthe government's attempted submission ofan errata sheetto CACO Dowd's deposition transcript in that proceeding.
THE PARTIES' CONTENTIONS Appellant notes that, before the hearing, in its ultimate response to interrogatory No. 23, the governmentnamed the factors considered by CACO Dowd in his decision to assess, and not waive, penalties upon Raytheon arising from allegedly expressly unallowable costs included in its 2004 Corporate Proposal, submitted on 31 May 2005. The response stated that CACO Dowdhad considered eight DCAA audit reports. Appellant asserts that each ofthose reports concerns purported "control deficiencies" that occurred after 31 May 2005 and were not a relevant consideration for a CO making a waiver determination underFAR42.709-5(c) (app. mot. at 1-2). Appellant contends that, after the government learned ofits position concerning relevance, CACODowd changed his factual position, but the government did not notify appellant or amend its interrogatory response. Appellant alleges that it was not until CACO Dowdwas on the witness stand at the hearing thathe statedhe hadrelied upon two additional audit reports, which involved alleged CAS 405 noncompliances pertaining to the dividend equivalents issue, saidto date backto 2004 and the incentive compensation issue, saidto date backto 2002 (app. mot. at 6). Appellant states thatthe dividend equivalents audit report was notproducedin discovery (id. at 7). Appellant asserts thatthe government's response to interrogatory No. 23 is a "judicial admission" thatbars CACODowd's allegedly contradictory hearing testimony and warrants granting its motion to strike the testimony and exhibits identified above. Appellant further contends that, apart from thejudicial admissions doctrine, the Board should grant its motionto strike as a sanction against the government for its alleged failures to supplement its interrogatory No. 23 response andto produce "critical documents" pertaining to CACO Dowd'stestimonythat were responsive to Raytheon's discovery requests, apparently referring to the two allegedly "previouslyundisclosed" incentive compensation and dividend equivalents audit reports andthe associated COFDs (app.mot.at 11,ex. 7(tr. 7/31-32)). The government opposes appellant's motion to strike on the ground that appellant hadpriornotice ofCACO Dowd's disputed hearing testimony because: (1) the government's discovery responses and deposition testimony by Messrs. Dowd and Christiansen made it clearthat CACO Dowd considered the two CAS 405 noncompliances in reaching his COFD at issue; (2) the government's failure to list two

13audit reports in its interrogatory response was inadvertent, plus one ofthem was included in the government's supplemental Rule 4 file and appellant already had a copy ofboth of them; (3) CACO Dowd'sreliance uponthose noncompliances was plainly disclosed in the government'spre-hearing brief; and (4) appellant conceded at the oral argument on its motion in limine that CACO Dowd had consideredthe Incentive Compensation CAS 405 audit report in connection with the COFD at issue and Judge Melnick's denial ofthat motion disposes ofappellant's current motion to strike. Appellant disputes this. The government also contends thatthere was no bindingjudicial admission; even ifthere were ajudicial admission, the Board shouldpermitthe government to withdraw and correct its interrogatoryresponse; sanctions are not warranted; and appellant's motion to strike is "'moot" because, in an abuse ofdiscretion review, the Board must consider all reasonable bases for the CACO's decision (opp'n at 44).
DISCUSSION
We first considerthe government's contentionthat Judge Melnick's denial of appellant's motion in limine is dispositive ofits current motion to strike because, ifit were, we need go no further. However, Judge Melnick's succinct order, and essentially undisputed portions ofappellant's record ofthe oral argumentbefore him (see app. reply, ex. 15 at 8-9), do not lead to the conclusionthe government advocates. Regarding appellant's claim that the government is boundbyjudicial admissions, there is a distinction between evidentiary admissions andjudicial admissions: Whenthe term admission is used without any qualifying adjective, the customary meaning is an evidentiary admission, that is, words in oral orwritten form or conduct of a party or a representative offered in evidence against the party. Evidentiary admissions are to be distinguished from judicial admissions. Judicial admissions are not evidence at all. Rather, they are formal concessions inthe pleadings in the case or stipulations by a party or its counselthathave the effect ofwithdrawing a fact from issue and dispensing wholly withthe need for proofofthe fact. Thus, thejudicial admission, unless allowedby the courtto be withdrawn, is conclusive in the case, whereas the evidentiary admission is not conclusive but is always subjectto contradiction or explanation. McCORMICK ON EVIDENCE, vol. 2, § 254 at 142 (4th ed. 1992) (footnotes omitted).

14The United States Court ofAppeals for the Federal Circuitrecently stated: Although this circuit has had limited opportunities to address the doctrine, it is clear from other circuits thatjudicial admissions, which "havethe effect ofwithdrawing a fact from issue and dispensing wholly withthe need for proofof the fact," are limited to formal admissions made in, for example, a complaint, answer, orpretrial order. Reliable Contracting Group, LLCv. Department ofVeteransAffairs, 779 F.3d 1329, 1334 (Fed. Cir. 2015) (citations omitted). Other circuits have applied strictprerequisites for a finding that ajudicial admission has occurred. For example, the First Circuit states: Unlike ordinary admissions, which are admissible but canbe rebutted by other evidence,judicial admissions are conclusive onthe party making them. Because oftheir binding consequences,judicial admissions generally arise only from deliberate voluntary waivers that expressly concede for the purposes oftrial the truth ofan alleged fact. Although there is a limited class ofsituations where, because ofthe highly formalized nature ofthe context in whichthe statement is made, ajudicial admission can arise from the "involuntary" act ofaparty, considerations offairness dictate thatthis class of"involuntary" admissions be narrow. Similarly, considerations offairness and the policy ofencouraging judicial admissions require that trialjudges be given broad discretion torelieve parties from the consequences of judicial admission in appropriate cases. UnitedStates v. Belculfine, 527 F.2d 941, 944 (1st Cir. 1975) (citations omitted). The Third Circuit notes that, "tobe binding,judicial admissions mustbe unequivocal." Glick v. White Motor Co., 458 F.2d 1287, 1291 (3rd Cir. 1972). The Sixth Circuit refers to "deliberate waivers ofthe right to present evidence" and quotes Belculjine in its description of judicial admissions. McDonaldv. GeneralMotors Corp., 110 F.3d 337, 340 (6th Cir. 1997). The Seventh Circuit refers to ajudicial admission as "aclear, deliberate and unambiguous concession" and an "intentional waiver." UnitedStates v. Cunningham, 405 F.3d 497, 504 (7th Cir. 2005); see similarlyMcCaskill v. SCI Management Corp., 298 F.3d 677, 682 (7th Cir. 2002) (to be sufficientto constitute a judicial admission there mustbe a "deliberate, clear, and unambiguous statement evincing an intentional waiver").

15While "[j]udicial admissions can be made at any stage ofa litigation,"Defoe Shipbuilding Co., ASBCA No. 17095, 74-1BCAii10,537 at 49,907, the parties disagree as to whether interrogatory responses can constitutejudicial admissions. The government contends, among other things, that they are not formal pleadings and they give rise, at most, to an evidentiary admission as to which the responding party is free to introduce additional or contrary evidence at trial, citing, e.g., Bradley v. AllstateInsurance Co., 620 F.3d 509, 527 n.21 (5th Cir. 2010) ("interrogatory responses are not bindingjudicial admissions") (gov'topp'nat 33-35). Appellantresponds thatthere is a split in authority as to whether interrogatory responses constitutejudicial admissions, citing, e.g., Spectrum Sciences andSoftware, Inc. v. UnitedStates, 98 Fed. Cl. 8, 27 (2011) ("a response to a contention interrogatory is ajudicial admission"), but it alleges that the Board has so treated them (app. reply at 14). However, the two Board cases to which appellant cites for this proposition do not support it. In Polote Corp., ASBCA No. 31115, 86-1 BCAii 18,640, ajf'don recon., 1986 ASBCA LEXIS 802 (12 March 1986), there was no clear discussion ofa "judicial" admission in an interrogatory response. Rather, the Board, on reconsideration, discussed an evidentiary admissionby a party-opponent under FED. R. EVID. 801. InAllied Materials andEquipment Co., ASBCA No. 17318, 75-1BCAii11,150 at 53,067, appellant "filedcomprehensivepleadings and made extensive requests for admissions and interrogatories whichhaveprovidedthe Boardwith a nearly comprehensive record of admitted facts undisputedby the parties." The Board statedthat one ofthe appellant's monetary claims was allowed as the result of"Governmentjudicial admissions," id. at 53,085, but it appeared to cite to governmentresponses torequests for admissions and to the hearing transcript. Regardless, there was no specific finding that interrogatory responses werejudicial admissions.
We conclude that, although the government's supplemental response to interrogatory No. 23 was inadvertently incomplete, it did not make any bindingjudicial admissions. There were no clear, deliberate and unambiguous concessions and intentional waivers ofits right to present evidence concerning audit reports or other information upon which CACO Dowd is alleged to have relied in his determination not to grantpenalty waivers to Raytheon. In fact, consideringthe government's response to Interrogatory No. 23 as a whole; its responses to Interrogatories No. 12 and 20(a); Messrs. Dowd's and Christiansen's deposition testimony; and the government's pre-hearing brief, appellant was on notice priorto the hearing that, in arriving at his COFD at issue, CACO Dowd considered alleged CAS 405 noncompliances, including in the incentive compensation and dividend equivalents areas, pertinentto time periodsprior to 2006.

16Moreover, we do not find evidentiary sanctions against the government to be warranted. It is up to the Board in its sound discretion to determine what evidence is admissible and the weight to be given it. Laguna Construction Co., ASBCA No. 58324. 14-1BCAii35,748 at 174,947 (addressing appellant's motion to strike); Board Rules 10(c), 11(d), 13(d). We will considerthe omission ofthe two audit reports from the government's response to Interrogatory No. 23, to the extent relevant, in weighing the government's evidence.
In view ofour decision, we do not reach the government's arguments that it should be allowed to withdraw and correct its response to Interrogatory No. 23 and that appellant's motion is '"moot." Turning to the government's motion to strike, the excerpts from the unrelated Court ofFederal Claims proceedingthat appellant would have us consider are not relevantto our decision on appellant's motion to strike. We grant the government's motion. DECISION
We deny appellant's motion to strike and grant the government's motion to strike. Dated: 29 March 2016

I concur

17 inistrative Judge :Armed Services Board ofContract Appeals

I concur

RICHARD SHACKLEFORD Administrative Judge Vice Chairman Armed Services Board ofContractAppealsI certify thatthe foregoing is a true copy ofthe Opinion and Decision ofthe Armed Services Board ofContractAppeals in ASBCANos. 57743, 57798, 58280, Appeals ofRaytheon Company, rendered in conformance with the Board's Charter.
Dated:

18 JEFFREYD. GARDIN Recorder, Armed Services Board ofContract Appeals