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Raytheon dodges $17 million overbilling claim

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Raytheon dodges $17 million overbilling claim

Raytheon Missile Systems escaped a multimillion-dollar claim that it overbilled the Pentagon for remanufacturing Tomahawk missiles when a federal appeals board rejected government arguments that would have extended a statute of limitations.

The Armed Services Board of Contract Appeals denied a government move to collect on overhead costs that were allegedly overpaid on part of the $374 million contract. The board ruled that the feds waited to long to attempt the recovery.

Much of the company's work on remanufacturing Tomahawk cruise missiles takes place in Tucson.

In 2006, a government audit alleged that Raytheon tacked on too much overhead to a subcontract with Lockheed Martin that was part of the 1999 Tomahawk deal, and said that the company overbilled by $9.2 million.

Raytheon disputed that the company had added too much overhead burden.

In a 2011 claim against the company, the feds bumped the alleged overbilling to $10.1 million, plus $6.8 million in interest. Raytheon appealed that decision in Feb. 2012.

The appeals board, in a decision released Jan. 28, sided with Raytheon. The government did not file its claim in a timely manner, the board said; there is a six-year statute of limitations on such claims.

"Raytheon ... disclosed sufficient facts to the government in 1999 to conclude it should have known about the claim at that time," wrote Administrative Judge Mark Melnick:

The events fixing any occurred in 1999, and Raytheon placed the government on notice of them at that time. At the latest, the government had access to all ofthe information to know about its claim by 26 August 2005. Accordingly, its 29 November 2011 claim was untimely and is therefore invalid.

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