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Boeing v. Roche and the Benefit Theory of Allocability: Unlocking Lockheed or Ignoring Northrop

Document Type

Article

Language

English (en)

Publication Date

2002

Publication Title

Public Contract Law Journal

Abstract

The crux of the allowability determination of the costs in Boeing (and many other cost allowability cases) is whether the costs are reasonable (a factor not addressed by the Boeing court) and whether they are similar or related to expressly disallowed costs. Allocability is not a significant inquiry for costs traditionally included as G&A expenses. Boeing reaches this conclusion, but its reasoning is unsatisfying because of its tacit two-step around the benefit theory. Even after a second bite at the apple, Boeing fails to address the puzzling language in Lockheed and ignores the clear language in Northrop, thus leaving intact an artificially constructed allocability requirement that is both intellectually unsound and legally confusing. Future courts would be well-served to settle this confusion once and for all.

Keywords

Boeing v. Roche, Benefit Theory of Allocability, Costs, Government Contractor

Publication Citation

John D. Inazu, Boeing v. Roche and the Benefit Theory of Allocability: Unlocking Lockheed or Ignoring Northrop, 32 Pub. Cont. L.J. 39 (2002)

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