Nowdy tells me there are several housekeeping type items that were filed on PACER we won’t bother with as they appeared unremarkable to her. However the prosecution today filed motions in opposition to defense motions to sever and exclude evidence from other contracts from trial.
In these motions we find out there is an upcoming Daubert Hearing and a good bit more about the government allegations on billing backoffice labor. In essence Greenlee makes a common sense argument that by using a labor factor to account for labor charges, TFG essentially billed costs such as annual and performance bonuses in advance. As a construction CPA the reasoning the government uses seems solid from an accounting standpoint and industry practice.
I read the motion that Greenlee intends to show how other projects constructed by TFG tied into the Beef Plant in that these back office labor provisions were negotiated and included in the project agreements elsewhere but not in the Beef Plant contract and how charging a labor multiplier resulted in an overbill. Figuring this very well could have been where Sean Carothers spent some of those countless hours helping the prosecution while in prison. Here is a snippet from the motion:
In the instant matter, the defendants claim to have used a multiplier, that is multiplying salaries by two to recoup indirect costs associated with their labor billings. As will be more fully explained at the upcoming Daubert hearings, items included in their use of the multiplier, such as employee inefficiency or yet to be paid bonuses, are not costs, direct or indirect, and have resulted in overbillings in this case. The contract in the instant matter does not contain a provision to use such a multiplier. While the use of multipliers in construction contracts may be an acceptable practice, it is not where it has not been negotiated and is not in the contract. The Facility Group has entered into contracts with other individuals and entities that contain negotiated provisions for the use of a multiplier. Thus, the evidence is direct proof of a regular business practice that when a multiplier has been negotiated and agreed to, it is in the contract.
Citizen & Concerned what do you guys make of this?