Boeing Co. v. United States, No. 19-2148 (Fed. Cir. 2020)Annotate this Case
Boeing permissibly changed cost accounting practices for its Defense contracts simultaneously. Some changes raised the government's costs; others lowered those costs. The Defense Contract Management Agency, invoking Federal Acquisition Regulation 30.606, determined the amount of the cost-increasing changes and demanded that Boeing pay that amount plus interest. Boeing did so, then sued, asserting that the government, in following FAR 30.606, committed a breach of contract and effected an illegal exaction. Boeing argued that FAR 30.606 is contrary to 41 U.S.C. 1503(b), which requires that simultaneously adopted cost-increasing and cost-lowering accounting changes be considered together and that, by following FAR 30.606’s command to disregard the cost-lowering changes, the government unlawfully charged it too much. The trial court held that Boeing had waived its breach of contract claim by failing to object to FAR 30.606 before entering into the contracts and that it lacked jurisdiction to consider Boeing’s illegal exaction claim, which was not based on a “money-mandating” statute.
The Federal Circuit reversed. A pre-award objection by Boeing would have been futile, as the government concededly could not lawfully have declared FAR 30.606 inapplicable in entering into the contract. A contractor is not required to pursue judicial relief before the award to avoid waiver. To establish Tucker Act jurisdiction for an illegal exaction claim, a party that has paid money over to the government and seeks its return must make a non-frivolous allegation that the government, in obtaining the money, has violated the Constitution, a statute, or a regulation.