Raytheon Missile Systems was awarded a contract with the Naval Air Systems Command to remanufacture the Tomahawk Missile (Horan and Stanton, 2013). The contract was agreed upon by both parties however a case was brought before Federal Court to determine if a breach of the contract had occurred in light of new costs incurred. The Federal Court found in favor if Raytheon due to a statute of limitations clause in the Contract Disputes Act (Horan and Stanton, 2013). The Contract Disputes Act (CDA) was enacted to handle claims pertaining to contracts with the United States Federal Government. Notably for this paper the CDA includes a statute of limitations that allows for a claim to be brought against a party involved within six years of the finding of the discrepancy (Horan and Stanton, 2013). In the case of Raytheon, the Federal Government argued that the extra costs that Raytheon passed on to the Government were in breach of the original contract. Raytheon used a subcontractor to aid in the completion of the missile remanufacture, which was allowed under the contract, resulting in overhead costs that passed on to the Government. The primary issue resulting in the finding in favor of Raytheon was that the Federal Government filed its claim after the six year window under the CDA’s statute of limitations. The claim by the Government was that it was not aware of the subcontractors higher cost initially, and that only subsequent analysis of the situation uncovered the reason for the higher cost. The decision found that the Government had the information, as Raytheon was found to have disclosed the information in a timely manner. The finding also stated that the reasoning for the finding was in part due to the act that “Claim accrual is not suspended simply because the Government may have been delayed in appreciating the implications of what Raytheon had disclosed” (Horan and Stanton, 2013). The CDA while enacted to help with the backlog of claims by and against the Federal Government, may in fact cause more claims to be found against the claimant in part due to the statute of limitations language. This as Horan and Stanton (2013) put it is a double edged sword for the Government, and is quickly leaning towards a shield for contractors.

References
HORAN, J., & STANTON, P. J. (2013). An Increasingly Important Shield Against Claims: The Contract Dispute Act's Statute of Limitations. Contract Management, 53(5), 80-83.