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CAS 413 Segment Closing


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joan, yes.

You are in noncompliance with CAS 413 if you fail to submit your segment closing adjustment analysis timely. You are in noncompliance with CAS 413 if you don't follow the prescribed DCMA/DCAA format. You are in noncompliance with CAS 413 if you fail to actually make the segment closing adjustment before the end of the FY in which you closed the segment. The materiality of the adjustment may be a good affirmative defense, but I'm betting you'd rather not go to court.

The CAS 413 segment closing pension adjustment is just about the hardest thing there is in government contract accounting to get right. There's a whole litany of legal cases (mostly at the Court of Federal Claims) that have established, slowly and expensively, the compliance requirements. If you are doing your adjustment without the benefit of a very knowledgeable expert to guide you, I would be nervous. Very nervous.

Hope this helps.

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I presume from your question that the contractor has done the proper calculation of the adjustment amount and that calculation is acceptable to the ACO. If that is the case, the CAS are predicated on the notion of materiality. If the ACO has determined that the adjustment amount due the government is immaterial, the ACO need not require the contractor to refund that amount to the government. However, the if the contractor agrees a refund is due and does not contest the amount, the ACO may have to explain why (s)he did not collect the refund as no dispute would exist. On the other hand, if the government owes the contractor additional money, it is up to the contractor whether to insist upon payment.

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Retreadfed,

You and I agree more often than not. In this instance, I think any presumption that the calculation was done correctly is, well, presumptuous. In more than a decade of dealing with CAS 413 and studying court cases on CAS 413, I think the number of times the Government and contractor have agreed on the calculation methodology can be counted on one hand.

H2H

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H2H, in regard to the CAS, I have always told clients that if anyone says they are an expert in the CAS to turn and run as no one understands it, not even the CASB. Exhibit no. 1, look at how the CASB treated the relationship between new 413.50©(12) and old 403.50©(12).

Joan, we cannot respond to your last post as you have not provided enough information.

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joan,

If you are not sure whether or not you have to comply with CAS 413-50©(12) requirements, you really, really, really need some expert assistance.

Not me -- I'm not fishing for work here. Frankly, CAS 413 cases are frustrating to support. But there are some good people out there who can assist you. I urge you to hire them. For starters, consider putting Karen Manos (Gibson Dunn) on retainer. She's litigated (and won) most of the precedent-setting CAS 413 cases at the COFC.

H2H

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