Deferred Compensation Allowable Due to Government’s Non-Payment of Invoices; COFC No. 12-142 C, Quimba Software Inc. v. United States

The plaintiff’s costs for deferred compensation are found to be allowable, where the government paid none of the contractor’s invoices for an entire fiscal year, and therefore created a situation where the contractor was forced to defer compensation for its principals, which triggered an exception to the Internal Revenue Code regarding the deductibility of such costs and related FAR language regarding whether such costs are allowable.