Law360, New York ( August 21, 2015, 10:23 AM EDT) -- One of the most frustrating experiences for contractors undergoing incurred cost audits is to receive an audit report that seeks not only to disallow costs, but to impose significant penalties on top of those costs. Though the Federal Acquisition Regulation makes clear penalties should only be imposed in limited cases for certain "expressly unallowable" costs, the Defense Contract Audit Agency often seeks to impose these penalties as the rule rather than the exception. The Armed Services Board of Contract Appeals' recent Raytheon decision offers some hope to contractors struggling with these issues, reaffirming that penalties should be imposed sparingly, even for costs that are ultimately found to be unallowable.[1] In doing so, the decision highlights how contractors can effectively push back when the Defense Contract Audit Agency seeks to impose penalties....