Excess contributions to a plan are by definition unnecessary, and therefore cannot be allocated to government contracts. Kodak next advances a general challenge to the board's interpretation of CAS 412.40, which includes several derivative arguments. It expostulates that the board's interpretation is (1) contrary to Riverside Research Institute v. United States, 860 F.2d 420 (Fed. Cir. 1988); (2) inconsistent with CAS 412 regulatory history and other CAS provisions; (3) restrictive by imposing a full-funding requirement that accelerates the amortization of actuarial gains and losses; and (4) contrary to executive branch interpretations. We address each in turn.
We have indeed approved the use of a similar definition of "cost" under earlier procurement regulations, stating that "`cost' is equated with the amount a contractor forgoes or gives up, i.e., its economic sacrifice, to obtain goods or services." Riverside Research Inst. v. United States, 860 F.2d 420, 422 (Fed. Cir. 1988) (citing FASB Concept Statement No. 3, which provides "[c]ost is the sacrifice incurred in economic activities — that which is given up or foregone to consume, to save, to exchange, to produce, etc."). CAS does include definitions for a number of relevant terms as follows:
The interpretation of regulations incorporated into a contract is purely a legal question. Riverside Research Institute v. United States, 860 F.2d 420, 422 (Fed. Cir. 1988). Because this case only involves legal issues, our review of the board's decision is plenary.
In evaluating the meaning of the original CAS 413.50(c)(12), the Federal Circuit has held that the court must be guided by the CASB's intent in promulgating the standard. Perry v. Martin Marietta Corp., 47 F.3d 1134, 1137 (Fed. Cir. 1995) ("our task in interpreting the meaning of these . . . provisions is ultimately to ascertain the CASB's intended meaning when it promulgated the CAS" (citing Riverside Research Inst. v. United States, 860 F.2d 420, 422 (Fed. Cir. 1988))). The Federal Circuit explained in Allegheny Teledyne:
In evaluating the meaning of the original CAS 413.50(c)(12), the Federal Circuit has held that the court must be guided by the CASB's intent in promulgating the standard. Perry v. Martin Marietta Corp., 47 F.3d 1134, 1137 (Fed. Cir. 1995) ("our task in interpreting the meaning of these . . . provisions is ultimately to ascertain the CASB's intended meaning when it promulgated the CAS" (citing Riverside Research Inst. v. United States, 860 F.2d 420, 422 (Fed. Cir. 1988))). The Federal Circuit explained inAllegheny Teledyne,
(Emphasis added.) In economic terms, the "cost" of an item is the amount that the person obtaining that item forgoes or gives up to obtain it. Riverside Research Institute v. United States, 860 F.2d 420, 422 (Fed. Cir. 1988). There is no economic difference between a requirement that a teacher make a co-payment of $5,000 to obtain early retirement and a requirement that the same teacher waive her rights to already-accrued benefits worth $5,000 to obtain the same retirement. The economic sacrifice in each case is the same.