Failure to Obtain Consent to Subcontract – All Subcontract Costs Disallowed | PNWC’s Government Contracting Update

We are in the process of bringing you synopses of a recent ASBCA decision that decided a number of issues related to DCAA’s (Defense Contract Audit Agency) audit of Technology Systems, Inc (TSI) fiscal year 2007 incurred costs, the ACO’s subsequent sustention of the DCAA findings and recommendations, and TCI’s appeal of the ACO’s decision before the ASBCA. Wednesday we discussed the issue of capitalization versus expensing costs. Bottom line on that one is you can’t use IRS regulations to justify your capitalization and depreciation practices. Yesterday we discussed TCI’s claim for travel expenses that exceeded the JTR (Joint Travel Regulations) maximums for lodging and per diem. In that one, TCI’s arguments were unpersuasive. Today we look at TCI’s failure to obtain “consents to subcontract” prior to awarding subcontracts.

Source: PNWC’s Government Contracting Update: Failure to Obtain Consent to Subcontract – All Subcontract Costs Disallowed