DynCorp Denied $6 Million CEO Payment Under Contract Cost Rules

DynCorp International LLC failed to show entitlement to reimbursement of $6 million in severance paid to a former CEO because the payments weren’t reasonable under government contract cost rules, the Armed Services Board of Contract Appeals said in a decision released Tuesday.

Steven F. Gaffney’s base salary of $2 million per year exceeded the Federal Acquisition Regulation’s compensation cap, and therefore the Defense Contract Management Agency properly disallowed severance payments calculated in part using salary and bonus amounts, Administrative Judge Craig S. Clarke said.

This conclusion is “common sense” because “there is nothing magic about a severance pay calculation that ...