In a contract where the contractor agreed to a cost share of 20% in exchange for the government waiving its right to claim title to certain inventions, the lower court ruled the contractor could recover only 80% of its allowable termination costs, rejecting the contractor’s argument the cost-sharing provision applied only if the contract was completed. On appeal, the higher court sided with the contractor saying it was entitled to recover all of its costs ruling the termination clause’s requirement to pay "all cost reimburseable" defined the type of costs not the amount of the costs (Jacobs Engrg Group v. US, 434 F.3d 1378). The court ruled the contractor was not entitled to recover fee on completed subcontractors’ work that was cost plus fixed fee work but was entitled to profit on subcontract work that was firm fixed price, stating the different outcomes were required by the "plain meaning" of the separate FAR clauses applicable to cost type and fixed price contracts (Lockheed Martin Corp. v England, 424 F.3d 1199). In its services contract, the termination clause provided the contractor to be paid on a percentage of work completed and when the contractor asked for more, the board ruled the contractor did not present evidence to show entitlement for more (Jon Winter & Assoc, ASBCA No. 2005-120-2). The Board rejected contractor’s claim for stand-by preaward burdened labor costs but allowed the claim for stand-by preaward equipment costs as long as the contractor could prove the preaward costs were allowed in accordance with FAR 31.205-32, Preaward costs (MIG Corp., ASBCA No. 54451). (Editor’s Note. The commentator indicates that the board seems to be applying FAR cost principles rather than the fairness principles set forth in FAR 49.201. The board also recognizes the contractor may be able to amortize start up costs over the terminated and unterminated parts of the contract.)

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