Depending on the materiality of the charge and if the related labor is direct or indirect this could be an issue. The employee is obviously mischarging his labor as his charged labor expenses are not following his actual incurred/booked labor. CAS has levels of materiality that are considered when reporting non-compliances. If this is an isolated one time transaction and the impact is minimal there would appear to be no basis for correction. However, as stated above I would inquire of the contractor to ascertain the employee's correct labor base, how many hours charged and if the employee's actions are direct or indirect in order to obtain a clear picture of this issue.