Question
You work with a Government agency managing several large defense contracts. On one of these contracts with a contractor named ATI, an issue has arisen
You work with a Government agency managing several large defense contracts. On one of these contracts with a contractor named ATI, an issue has arisen concerning the allowability of certain ATI incurred and invoiced costs. ATI's contract is a cost plus award fee contract. The specific costs in question involve some $50,000 in costs running the ATI fitness center at the ATI main business campus. Additionally, ATI paid $500,000 to a political action committee (PAC) which supports legislative initiatives for defense contractors. Finally, ATI incurred and invoiced the Government $1.5 million for its legal fees associated with a proceeding brought against it by the local U.S. Attorney's Office for an alleged violation of the False Claims Act under 31 U.S.C. 3730. This False Claims act matter was ultimately resolved and settled through a consent decree between the parties. Before he visits the local DCAA auditor for guidance on what actions to take, your boss want you advising him on whether any of these three sums are allowable under the FAR.
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