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Southwest Marine, Inc. v. United States

ELR Citation: 38 ELR 20201
Nos. No. 07-55229, (9th Cir., 08/06/2008)

The Ninth Circuit held that fees incurred by a shipyard operator during its unsuccessful defense of a private party Clean Water Act lawsuit are not allowable costs under Subpart 31.2 of the Federal Acquisition Regulation, 48 C.F.R. §§31.201-31.205. The costs of legal and other proceedings described in §31.205-47(b) are similar to the shipyard operator's claimed costs. Its costs do not reflect general legal advice provided to the contractor. Rather, the costs reflect the contractor's defense of a specific lawsuit and the consequences of its unsuccessful defense. Because §31.205-47(b) best captures the essential nature of the operator's costs, and because the costs identified in §31.205-47(b) are disallowed, the operator's costs are also disallowed.