Bill Strong Enterprises, Inc. v. Shannon

Bill Strong Enterprises, Inc. (BSE) (plaintiff) entered into a fixed-price contract with the Department of the Army (government) (defendant) to renovate Air Force housing units. During the performance period, BSE notified the government that housing units were being released to BSE out of sequence, resulting in significant delays and cost overruns. BSE submitted price and cost data at the government’s request. The government did not dispute BSE’s demand for additional compensation to account for the delay-driven cost overruns. The government instructed the Defense Contract Audit Agency (DCAA) to audit BSE cost claims. During the audit, BSE completed all contract work. To properly address DCAA’s information requests, BSE hired Excell, Inc., a consulting firm, to review and analyze BSE’s data and prepare a request for an equitable adjustment to submit to the government. BSE’s request included approximately $200,000 in consulting costs for Excell’s work. The government and BSE reached a settlement regarding the delay costs; however, the government denied BSE’s request for reimbursement of Excell’s consultant fees. BSE appealed to the Armed Services Board of Contract Appeals (Board). The Board affirmed, holding that BSE was not entitled to recover Excell’s consultant costs because those costs were incurred (1) after the completion of all contracted work; and (2) in connection with the prosecution of claims against the government. BSE appealed.