General Dynamics Corporation v. Leon Panetta, Secretary of Def
2013 U.S. App. LEXIS 9389
| Fed. Cir. | 2013Background
- General Dynamics appeals a final noncompliance determination with CAS 412 over its pension-cost calculations for RPFPR.
- GD used midyear (partial-year) pension fund values and blended them with an 8% January 1 growth assumption to compute base-year and forward rates.
- ASBCA held that midyear values and the blended rate are actuarial assumptions that reflect short-term fluctuations and violate CAS 412-50(b)(4).
- GD had previously followed the blended-rate method for many years; the government objected in 2006 and issued a 2007 noncompliance determination.
- In 2008 GD again used the blended-rate method; the CO issued a second noncompliance determination, prompting GD's appeal to the ASBCA and then to the Federal Circuit.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether midyear values and blending constitute actuarial assumptions | GD argues midyear data is factual, not an actuarial assumption. | Government contends midyear data and blending are actuarial assumptions under CAS 412-30(a)(3). | Yes; they are actuarial assumptions. |
| Whether use of midyear data and blending causes distortions from short-term fluctuations | GD asserts midyear data yields more accurate long-term projections and does not distort future years. | Government contends midyear data reflects short-term fluctuations violating CAS 412-50(b)(4) for long-term projections. | Yes; it causes distortions and violates CAS 412-50(b)(4). |
Key Cases Cited
- Gates v. Raytheon Co., 584 F.3d 1062 (Fed. Cir. 2009) (CAS framework for pension cost measurement)
- United States v. Boeing Co., 802 F.2d 1390 (Fed. Cir. 1986) (CAS regulations trump conflicting FAR provisions)
- Freeman v. Quicken Loans, Inc., 132 S. Ct. 2034 (U.S. 2012) (nosciatur agreement on statutory language (citation context in dissent))