This morning, I was searching for bid protest decisions from the Court of Appeals for the Federal Circuit (CAFC) and the Court of Federal Claims (COFC) and stumbled across two interesting decisions on indirect research and development (IR&D). I remember listening to debates about IR&D in the bowels of the then General Accounting Office (GAO), now the Government Accountability Office. I was a pup back then in the early 1970s. I'm a pup no longer. The decisions involve the phrase--required in the performance of a contract. Apparently, the issue has been controversial for years. On page 5 of the CAFC decision on ATK Thiokol, Inc. v. U. S., the Court states
The COFC decision is at ATK Thiokol, Inc., v. U. S. See p. 33 for "The 'Debate' Concerning 'Required in The Performance Of A Contract' Language In CAS 420."
On p. 24 of the COFC decision, we are given a brief lecture on the Federal Acquisition Regulation (FAR) and the Cost Accounting Standards (CAS) issues of allowability and allocability and the precedence of the FAR or CAS when there is "any conflict . . . as to an issue of allocability." (p. 26 of the COFC decision.) In addition, there is a decent history of the Cost Accounting Standards Board that we don't often see.
This case in an important case because, as the COFC stated:
In the end, the COFC ruled that the contractor properly allocated its independent research and development costs. The CAFC affirmed that ruling.
The two decisions comprise 61 pages. This page count can be reduced by skipping some procedural pages. However, there is a wealth of information here. In addition, you will be reading a first opinion on the subject. Start with the COFC decision which includes the research and read the CAFC to top it off. Somewhere in the two decisions, you will reach a point and say to yourself: "huh, I never knew that."