         NOTE: This opinion is nonprecedential.

  United States Court of Appeals
      for the Federal Circuit
               __________________________

     STEVEN CHU, SECRETARY OF ENERGY,
                  Appellant,
                            v.
          THE BOEING COMPANY,
   (SUCCESSOR-IN-INTEREST OF ROCKWELL
      INTERNATIONAL CORPORATION),
                  Appellee.
        -------------------------------------------------
            THE BOEING COMPANY,
   (SUCCESSOR-IN-INTEREST OF ROCKWELL
      INTERNATIONAL CORPORATION),
                         Appellant,
                            v.
     STEVEN CHU, SECRETARY OF ENERGY,
                  Appellee.
               __________________________

                    2011-1304, -1317
               __________________________

   Appeal from the Civilian Board of Contract Appeals in
Nos. 337, 338, 339, and 978, Administrative Judge R.
Anthony McCann.
              __________________________

              Decided: November 20, 2012
ENERGY   v. BOEING CO                                    2


                __________________________

    DOMENIQUE KIRCHNER, Senior Trial Counsel, Com-
mercial Litigation Branch, Civil Division, United States
Department of Justice, of Washington, DC, argued for
Secretary of Energy. With her on the brief were TONY
WEST, Assistant Attorney General, JEANNE E. DAVIDSON,
Director, and BRYANT G. SNEE, Deputy Director.

    JAMES J. GALLAGHER, McKenna Long & Aldridge LLP,
of Los Angeles, California, argued for The Boeing Com-
pany. On the brief was S. JEAN KIM, Chadbourne & Parke
LLP, of Los Angeles, California.
              __________________________

Before BRYSON, O’MALLEY, and WALLACH, Circuit Judges.
 Opinion for the court filed by Circuit Judge WALLACH.
Opinion concurring-in-part and dissenting-in-part filed by
                 Circuit Judge BRYSON.
WALLACH, Circuit Judge.
    This case arises under the Contract Disputes Act, 41
U.S.C. §§ 7101-09. The Department of Energy (“DOE”)
appeals and Rockwell International Company (“Rock-
well”) cross-appeals from decisions of the Civilian Board
of Contract Appeals (“Board”) that certain litigation
defense costs are allowable under the parties’ manage-
ment and operating contracts (“contracts”) and thus may
be recovered by Rockwell.1 We affirm-in-part and reverse-
in-part the Board’s determinations.




   1    The Boeing Company (“Boeing”) is the successor-
in-interest of Rockwell. All references herein to Rockwell
and Boeing are interchangeable.
3                                      ENERGY   v. BOEING CO


                       BACKGROUND
    A. The Contracts
    Beginning in 1975, DOE entered into a series of con-
tracts with Rockwell for the management, operation, and
maintenance of the government-owned Rocky Flats Nu-
clear Weapons Plant in Colorado (“Rocky Flats”). Abra-
ham v. Rockwell Int’l Corp., 326 F.3d 1242, 1244 (Fed.
Cir. 2003).2 Private industrial firms have managed and
operated the facility since its construction in the early
1950s. Id. at 1245. The contracts governing the manage-
ment and operation of the facility require the Govern-
ment, not the private firms, to assume almost all
operational and financial risks because of the inherent
danger in manufacturing nuclear weapon components. Id.
Rockwell’s contracts contain cost-reimbursement provi-
sions that enable Rockwell to recover all allowable costs.
Id. The dispute here centers on whether certain costs
incurred by Rockwell in defending itself in litigation are
recoverable.
    The two contracts currently at issue are the 1986 con-
tract effective from January 1, 1986 until December 31,
1988 and the 1989 contract effective from January 1, 1989
until December 31, 1989.3 They were both cost-plus-
award-fee contracts. 48 C.F.R. § 16.405-2.4 Both contracts

    2   Previously, in Abraham, we addressed a dispute
between the same parties regarding the allowability of
costs incurred in defense of allegations that never ripened
into criminal charges. See infra n. 7.
    3   The pertinent provisions in the 1986 and 1989
contracts are identical except for the Fines and Penalties
Clause, and the differences between these two clauses are
minor and do not impact our analysis.
    4   48 C.F.R. § 16.405-2 provides:
     A cost-plus-award-fee contract is a cost-
     reimbursement contract that provides for a fee
ENERGY   v. BOEING CO                                        4


provided that “allowable cost shall not include the cost of
any item described as unallowable . . . .”
    Effective January 1, 1987, the parties adopted Modifi-
cation M097, which added clause (e)(32) to the 1986
contract (“clause (e)(32)”), and provided as follows:
    (e) Items of Unallowable Costs. The following
    items of costs are unallowable under this contract
    to the extent indicated:

    ....

    (32) Costs incurred in defense of any civil or
    criminal fraud proceeding or similar proceeding
    (including filing of any false certification) brought
    by the Government where the Contractor, its
    agents or employees, is found liable or has
    pleaded nolo contendere to a charge of fraud or
    similar proceeding (including filing of a false certi-
    fication).

    (emphasis added).5


     consisting of (1) a base amount fixed at incep-
     tion of the contract, if applicable and at the
     discretion of the contracting officer, and (2) an
     award amount that the contractor may earn in
     whole or in part during performance and that
     is sufficient to provide motivation for excel-
     lence in the areas of cost, schedule, and techni-
     cal performance. See 16.401(e) for the
     requirements relative to utilizing this contract
     type.
    5    Clause (e)(32) is virtually identical to provisions of
the Department of Defense Authorization Act, 1986 (“the
1985 Act”), Pub. L. No. 99-145, 99 Stat. 583,683,774-75
(November 8, 1985). The 1985 Act bars a contractor’s
recovery of 10 types of costs, and states:
5                                       ENERGY   v. BOEING CO


    Effective January 1, 1989, the parties adopted Modifi-
cation M124, which provides:
    (d) Items of Allowable Cost. Subject to the other
    provisions of this clause, the following items of
    cost of work done under this contract shall be al-
    lowable to the extent indicated:

    ....

    (16) All cost incurred by the Contractor with re-
    spect to any and all liabilities, claims, demands,
    damage costs, or penalties (such as civil sanctions
    including fines), arising out of, or related to envi-
    ronmental, safety and health activities, including
    costs incurred with respect to investigation, re-
    moval, remedial action, ground and surface water
    or other clean-up of hazardous, toxic or contami-
    nated material(s), except for those costs that re-
    sult from conduct identified in subparagraph
    (e)(17)(ii) of the clause entitled, “Allowable Costs,
    Base Fee and Award Fee.”



     (e)(1) The following costs are not allowable under a
     covered contract:
     ....
     (C) Costs incurred in defense of any civil or criminal
     fraud proceeding or similar proceeding (including fil-
     ing of any false certification) brought by the United
     States where the contractor is found liable or has
     pleaded nolo contendere to a charge of fraud or simi-
     lar proceeding (including filing of a false certifica-
     tion).
Id. The Board turned to this act and its legislative his-
tory in interpreting the contract provisions at issue. See,
e.g., Boeing Co. v. Dep’t of Energy, CBCA 337, 338, 339,
978, 11-1 BCA ¶ 34,634 (December 14, 2010).
ENERGY   v. BOEING CO                                     6


    (“Environmental Costs Clause”) (emphasis added).
Subparagraph (e)(17)(ii) expressly excludes costs that
“result from willful misconduct or lack of good faith on the
part of any of the Contractor’s managerial personnel.”
   B. The Stone Suit
   On June 25, 1987, Mr. James Stone6 informed the
Federal Bureau of Investigations of alleged environ-
mental crimes that occurred at Rocky Flats; the Depart-
ment of Justice began investigating in 1988.7
    On July 5, 1989, Mr. Stone, instituted a qui tam ac-
tion alleging violations of the FCA against Rockwell in the
United States District Court for the District of Colorado.
However, on December 20, 1996, the Government and Mr.
Stone (collectively, “plaintiffs”) filed a joint amended
complaint alleging violations of the FCA (Count 1), com-
mon law fraud (Count 2), breach of contract (Count 3),
payment by mistake (Count 4), and unjust enrichment
(Count 5); Mr. Stone additionally asserted other FCA
violations (Count 6). Plaintiffs contended that during
certain time periods, Rockwell violated the FCA by using
false or fraudulent statements to obtain its award fees
and operating costs. Following a jury trial, the district

   6    From November 1980 through March 1986, Mr.
Stone worked as an engineer at the Rocky Flats. Rockwell
Int’l Corp. v. United States, 549 U.S. 457, 460 (2007).
     7  In response to these investigations, Rockwell re-
tained legal counsel both for itself and for individual
employees to defend against the allegations. Some of the
allegations never ripened into criminal charges. In a
previous case before this court, we affirmed the Board’s
decision that costs incurred defending against allegations
that never ripened into criminal charges were allowable;
we held that “the legal fees in defense against Uncharged
Conduct are recoverable because they are within the
scope of allowable costs under the Environmental Costs
Clause.” Abraham, 326 F.3d at 1254.
7                                       ENERGY   v. BOEING CO


court entered judgment against Rockwell solely for Count
1 for certain time periods. The judgment provided for
plaintiffs’ recovery of $4,172,327.40 (three times the jury
award), and the Government’s recovery of a civil penalty
of $15,000.00. The Tenth Circuit affirmed these awards.
United States v. Rockwell Int’l Corp., 282 F.3d 787 (10th
Cir. 2002).
    On April 4, 2006, Rockwell filed a petition for a writ of
certiorari. The only issue before the Supreme Court was
“whether respondent Mr. Stone was an original source”
for purposes of standing to bring suit. Rockwell Int’l Corp.
v. United States, 549 U.S. 457, 460 (2007). An “original
source” is “an individual who [1] has direct and independ-
ent knowledge of the information on which the allegations
are based and [2] has voluntarily provided the informa-
tion to the Government before filing an action under this
section which is based on the information.” 31 U.S.C. §
3730(e)(4)(B). This question pertained only to FCA viola-
tions involving pondcrete.8 On March 27, 2007, the Court
held that Mr. Stone was not an “original source” with
respect to FCA violations involving pondcrete. Rockwell,
549 U.S. at 479. Therefore, the Court found that the
district court lacked jurisdiction to enter judgment in
favor of Mr. Stone, and reversed the Tenth Circuit’s
holding to the contrary. Id.9

    8    Pondcrete is a mixture of sludge from solar ponds
and cement.
    9    With regards to the Government’s actions in the
case, specifically its intervening and filing of a joint
amended complaint with Stone, Justice Scalia stated for
the majority:
     Does this conclusion cast into doubt the courts’
     jurisdiction with respect to the Government as
     well? . . . . Not even petitioners have suggested
     the bizarre result that the Government's judg-
     ment must be set aside. It is readily enough
ENERGY   v. BOEING CO                                    8


     On June 18, 2007, the Tenth Circuit affirmed the
judgment in favor of the Government for the reasons
articulated in its prior opinion, United States v. Rockwell
Int’l Corp., 282 F.3d 787 (10th Cir. 2002), but remanded
with directions to vacate the portion of the judgment
entered in favor of Mr. Stone and dismiss his portion of
the case. United States v. Rockwell lnt’l Corp., 492 F.3d
1157 (10th Cir. 2007).
   C. Stone Defense Costs
    At the beginning of the Stone suit, when Rockwell was
served with Mr. Stone’s Complaint on November 13, 1995,
Rockwell submitted to DOE vouchers for payment of
related defense costs (“Stone defense costs”). On April 22,
1993, DOE stated it would provisionally reimburse Rock-
well and “reserve[] the right to evaluate the final outcome
of the case and seek reimbursement from Rockwell for
any amount paid . . . .” A160. After conditionally reim-
bursing Rockwell $4,060,669.03 in Stone defense costs,
DOE notified Rockwell on December 6, 1995, that those
costs were unallowable pursuant to the DOE and Rock-
well contracts.
    In May 2005, Rockwell requested a contracting offi-
cer’s final decision, seeking $11,344,081.14 as reimburse-
ment for the Stone defense costs incurred from November
14, 1995, to December 31, 2004. On September 30, 2005,
the contracting officer issued a final decision denying
Rockwell’s claim. Additionally, the contracting officer

    avoided, as common sense suggests it must be, by
    holding that an action originally brought by a
    private person, which the Attorney General has
    joined, becomes an action brought by the Attor-
    ney General once the private person has been de-
    termined to lack the jurisdictional prerequisites
    for suit.
Rockwell, 549 U.S. at 478.
9                                      ENERGY   v. BOEING CO


rendered a final decision granting the Government’s claim
against Rockwell for recovery of $4,060,669.03, the
amount that DOE provisionally advanced as reimburse-
ment for Rockwell’s Stone defense costs, plus interest.
Rockwell appealed this final decision along with other
related later decisions to the Board which were consoli-
dated into various appeals before the Board.
    D. Board Decisions
    From July 9, 2007 to March 8, 2011, six Board deci-
sions were issued which currently are being challenged by
one or both parties.10 The Board considered whether
Rockwell’s costs incurred defending Stone were unallow-
able under clause (e)(32) and held that such costs could be
apportioned on a claim-by-claim basis and determined
that: (1) costs relating solely to claims where the Govern-
ment was successful are unallowable; (2) costs relating
solely to claims where Rockwell was successful are allow-
able under clause (e)(32); and (3) costs relating to common
costs, i.e., costs incurred defending against both claims
where Rockwell was successful and was found liable, are
unallowable.




    10  See Boeing Co. v. Dep’t of Energy, CBCA 337, 338,
339, 2007 WL 5035796 (July 9, 2007); Boeing Co. v. Dep’t
of Energy, CBCA 978, 08-1 BCA ¶ 33,822 (March 21,
2008); Boeing Co. v. Dep’t of Energy, CBCA 978, 08-2 BCA
¶ 33,893 (June 23, 2008); Boeing Co. v. Dep’t of Energy,
CBCA 337, 338, 339, 978, 09-1 BCA ¶ 34,026 (December
10, 2008); Boeing Co. v. Dep’t of Energy, CBCA 337, 338,
339, 978, 11-1 BCA ¶ 34,634 (December 14, 2010); Boeing
Co. v. Dep’t of Energy, CBCA 337, 338, 339, 978, 11-1 BCA
¶ 34,703 (March 8, 2011).
ENERGY   v. BOEING CO                                    10


   DOE filed a timely appeal. Rockwell cross-appealed.
We have jurisdiction pursuant to 28 U.S.C. §
1295(a)(10).11
                        DISCUSSION
     The Board’s factual determinations will be set aside if
arbitrary, capricious, so grossly erroneous as to necessar-
ily imply bad faith, or not supported by substantial evi-
dence. 41 U.S.C. § 7107(b)(2). The Board’s determinations
of questions of law, including interpretation of contracts,
statutes and regulations, are subject to de novo review.
Lear Siegler Servs. v. Rumsfeld, 457 F.3d 1262, 1265-66
(Fed. Cir. 2006).
     We first address the term “proceeding” in clause
(e)(32) and this clause’s interaction with the Environ-
mental Costs Clause within the contract. Next, we turn
to the Stone defense costs incurred by Rockwell after Mr.
Stone filed the now reversed qui tam action and before
the Government intervened. Finally, we turn to the
“common costs” incurred by Rockwell in defending against
claims during the period of litigation after the Govern-
ment intervened where Rockwell was successful on some
claims but was found liable on others.
   A. “Proceeding” in clause (e)(32) and the Environ-
mental Costs Clause
    The Stone jury found Rockwell liable on three FCA
violations against the Government. Whether Rockwell’s
costs of defending this lawsuit are allowable under its

   11   Previously, the parties appealed to this court;
however, we held that because the Board had yet to
determine whether clause (e)(32) allows Rockwell to
recover common costs, the Board’s decision was not final,
and we therefore lacked jurisdiction. Chu v. Boeing Co.,
375 F. App’x. 10, 12 (Fed. Cir. 2010).
11                                      ENERGY   v. BOEING CO


contracts with DOE rests in large part on the proper
interpretation of two provisions found in those contracts:
clause (e)(32) and the Environmental Costs Clause.
    We find that a plain reading of clause (e)(32) suggests
that the Board’s more limited reading of “proceeding”
found within this provision is correct. Read in its en-
tirety, the clause disallows
     [c]osts incurred in defense of any civil or criminal
     fraud proceeding or similar proceeding (including
     filing of any false certification) brought by the
     Government where the Contractor, its agents or
     employees, is found liable or has pleaded nolo con-
     tendere to a charge of fraud or similar proceeding
     (including filing of a false certification).

DOE contends that in “Clause (e)(32), the choice of the
word ‘charge,’ which Rockwell agrees means a claim,
stands in contrast to the choice of the word ‘proceeding.’”
Response and Reply Br. of the Secretary of Energy at 8
(internal citation omitted). We disagree. In this context,
“charge of fraud” is immediately followed by “or similar
proceeding,” illustrative that a “charge of fraud” is a type
of “proceeding.” This indicates that a “proceeding” means
something less than an entire litigation action as DOE
contends. Additionally, “proceeding” is twice followed by
“including filing of any false certification,” which again is
a claim, not an entire case.12 However, as pointed out by

     12 We will not adopt the interpretation of the word
“proceeding” from our prior case law that dealt with a
different statute and a different contract. In Rumsfeld v.
General Dynamics Corporation, 365 F.3d 1380 (Fed. Cir.
2004), we held that, in the context of section 2324(k) of
the Major Fraud Act (10 U.S.C. § 2324), the Armed Ser-
vices Board of Contract Appeals incorrectly “required the
apportionment of legal costs for defending against differ-
ENERGY   v. BOEING CO                                    12


the DOE, “proceeding” is also joined to the words “civil”
and “criminal,” two types of actions, not two types of
claims.13

ent claims with different outcomes within a single pro-
ceeding.” Id. at 1381. In General Dynamics, which in-
volved awarding government subcontracts in exchange for
bribes and kickbacks, we determined that “proceeding”
“must be given a broad meaning, such that it includes all
claims or causes of action within a particular case, action
or proceeding.” Id. at 1386. We found the text, other
sections of the Major Fraud Act, and the legislative his-
tory to support this interpretation. Id. General Dynamics
presented a situation unlike the one currently before us.
In General Dynamics, we did not define “proceedings” for
all future purposes; unlike here, the relevant text, con-
text, and legislative history supported a broad reading of
the term “proceeding,” as it was used in 1988 in section
2324(k) of the Major Frauds Act. Additionally, as we
stated clearly in General Dynamics, the “holding of this
case is limited to its facts” and specifically to situations
“where there is a disposition of proceeding by consent or
compromise,” a situation not currently before us. Id. at
1385 n.2, 1387.
     13  The dissent finds further interpretation beyond
the plain meaning warranted and turns to the 1985 Act,
its legislative history, background, and regulatory inter-
pretation in order to determine the proper definition of
“proceeding.” However, reading the contract as a whole, it
is unnecessary to consider extrinsic evidence to interpret
the term at issue. Coast Fed. Bank, FSB v. United States,
323 F.3d 1035, 1038 (Fed. Cir. 2003) (citing McAbee
Constr., Inc. v. United States, 97 F.3d 1431, 1435 (Fed.
Cir. 1996)) (“Where, as here, the provisions of the Agree-
ment are phrased in clear and unambiguous language,
they must be given their plain and ordinary meaning, and
we may not resort to extrinsic evidence to interpret them .
. . . The Agreement must be considered as a whole and
interpreted so as to harmonize and give reasonable mean-
ing to all of its parts.”).
     Even if the proper definition of “proceeding” is am-
biguous, it is “a fundamental precept of common law that
13                                      ENERGY   v. BOEING CO


    When construing a contract containing conflicting
terms, general rules of interpretation apply. It is a gen-
eral rule of contract interpretation that terms should not
be interpreted so as to render them ineffective or super-

the intention of the parties to a contract control its inter-
pretation.” Beta Sys. Inc. v. United States, 838 F.2d 1179,
1185 (Fed. Cir. 1988) (citing Firestone Tire & Rubber Co.
v. United States, 444 F.2d 547, 551 (Ct. Cl. 1971); see also
Alvin Ltd. v. United States Postal Serv., 816 F.2d 1562,
1565 (Fed. Cir. 1987) (“In the case of contracts, the
avowed purpose and primary function of the court is the
ascertainment of the intention of the parties.”). In this
case, as we recognized in Abraham, the contracts were
negotiated with an express DOE intent to assume almost
all liability: “Because of the inherent danger in manufac-
turing nuclear weapons components, the [Plant] contracts
required the government to assume virtually all opera-
tional and financial risks in performing the contracts.”
326 F.3d at 1245. See, e.g., Rockwell Int’l Corp, EBCA
Nos. C-9509187, C-9509220, C-9509221 (October 31,
2001) (“Typically, at least at the times relevant here,
M&O contracts allocated virtually all operational and
financial risks to the United States Government. Limit-
ing contractor risk has always been a prerequisite to
engaging suitable companies as contractors. DOE officials
recently recognized that ‘[i]f the Department did not fully
indemnify its contractors, . . . the risks to the contractors
would be so great, that the Department would be unable
to find qualified contractors willing to run the Depart-
ment’s facilities.’”); see also A984, 1000, 1033-41. This
intent counsels for a more limited meaning of “proceed-
ing,” consistent with our above analysis.
     While it is true that congressional intent is also rele-
vant to ascertaining the contracting parties’ intent when
statutory provisions are incorporated into a contract,
Roedler v. Dep’t of Energy, 255 F.3d 1347, 1352 (Fed. Cir.
2001), the intent behind the 1985 Act of Congress cannot
outweigh the plain meaning of the provision, which is
evident when the provision is read in context. Nor does
the legislative history outweigh other persuasive evidence
of the parties’ contractual intent.
ENERGY   v. BOEING CO                                        14


fluous. Lockheed Martin IR Imaging Sys. v. West, 108
F.3d 319, 322 (Fed. Cir. 1997); see also Restatement
(Second) of Contracts § 203(a) (“an interpretation which
gives a reasonable, lawful, and effective meaning to all
the terms is preferred to an interpretation which leaves a
part unreasonable, unlawful, or of no effect”). The narrow
reading of clause (e)(32) adopted by the Board is neces-
sary to avoid conflict with other provisions of the contract,
particularly the Environmental Costs Clause, which
clearly provide for reimbursement of costs incurred in
defending claims related to environmental, safety, and
health activities except in cases of willful misconduct or
lack of good faith.
    The Environmental Costs Clause states that “all cost
incurred . . . with respect to any and all liabilities, claims,
demands, damage costs, or penalties (including fines),
arising out of, or related to environmental, safety and
health activities” are allowable for reimbursement. As we
have previously stated concerning this clause:
    The clause refers to “all costs . . . with respect to
    any and all . . . penalties (such as civil sanctions
    including fines), arising out of, or related to envi-
    ronmental . . . activities.” Further, it expressly re-
    fers to the costs incurred “with respect to
    investigation.” Tellingly, the clause specifically
    excludes “costs that result from conduct identified
    in subparagraph (e)(17)(ii).” That subparagraph
    refers to costs that “result from willful misconduct
    or lack of good faith on the part of any of the Con-
    tractor’s managerial personnel.” The limited na-
    ture of this exclusion suggests a broad scope of
    coverage where, as here, there is no claim of will-
    ful misconduct or lack of good faith by managerial
    personnel.
15                                       ENERGY   v. BOEING CO


Abraham, 326 F.3d at 1252-1253.
    In Abraham we found that the Environmental Costs
Clause prevailed over the Contesting Actions Clause14 in
the context of allegations against Rockwell that had not
ripened to criminal charges. Id. at 1254. Abraham is
informative in this context. As in this case, we were
confronted with a conflict between the Environmental
Costs Clause and a clause under “Items of Unallowable
Costs.” In Abraham, we rejected DOE’s argument that
the unallowable costs provision at issue excluded costs
allowable under the Environmental Costs Clause because
instead of “partially limit[ing] the coverage of the [Envi-
ronmental Costs Clause],” the Government’s reading
“effectively . . . rewr[o]te the clause” to render it “entirely
inapplicable to all proceedings brought under the federal
environmental laws, an area that the clause was explicitly
drafted to cover.” 326 F.3d at 1253.
    Similarly here, DOE’s interpretation would render the
Environmental Costs Clause completely inapplicable to
an entire action involving liabilities and claims related to
environmental, safety and health activities whenever, as
part of that entire action, liability was found for fraud or
claims similar to fraud. This is an area the Environ-
mental Costs Clause was explicitly drafted to cover. See
A1054-55 (the Environmental Costs Clause covers “any

     14 The Contesting Actions Clause makes unallow-
    able the following:
    Legal, accounting, and consulting services and re-
    lated costs incurred in connection with the prepara-
    tion and issuance of stock rights, organization or
    reorganization, prosecution or defense of antitrust
    suits, prosecution of claims against the United States,
    contesting actions of [sic] proposed actions of the
    United States, and prosecution or defense of patent
    infringement litigation.
Abraham, 326 F.3d at 1248 n.3.
ENERGY   v. BOEING CO                                         16


and all liabilities [and] claims . . . arising out of, or related
to environmental, safety and health activities”). By
contrast, there is nothing in the text of clause (e)(32) or
elsewhere in the record that indicates clause (e)(32) was
explicitly drafted to cover claims related to environ-
mental, safety and health activities or any claims that are
not “fraud... or similar proceeding[s]” and where Rockwell
was not “found liable.” Indeed, the “proceedings” as
articulated in this clause are limited to “fraud” proceed-
ings and therefore renders themselves distinct from other
types of proceedings, e.g., those related to environmental
claims.
    DOE argues at length that there are adequate appli-
cable regulations, statutes, legislative history, and case
law to indicate that “proceeding” means “action.” How-
ever, these indications do not overcome the expansive
language of the Environmental Costs Clause. DOE’s
interpretation overlooks the explicitly broad scope of the
Environmental Costs Clause and the explicitly narrow
limitation of clause (e)(32) to “fraud . . . or similar pro-
ceeding[s]” where the contractor is “found liable.” We
therefore affirm the Board’s interpretation of “proceed-
ing.”
    B. Stone Defense Costs and the Supreme Court
    DOE contends that the Board “erred in applying its
‘restrictive’ definition of ‘proceeding’ to Rockwell’s claim
for Stone defense costs incurred from the time the suit
was filed to the date the Government moved for leave to
intervene, and determining such costs ‘could be consid-
ered to have been expended in a different and separate
suit or proceeding.’” Opening Br. of the Secretary of
Energy at 51. DOE argues, notwithstanding the findings
of the Supreme Court, “[t]here was only one Stone suit.”
Id.
17                                     ENERGY   v. BOEING CO


    Rockwell contends that it does not matter how many
suits there were in Stone, only that “as the Board cor-
rectly concluded, allowability turns on whether the Gov-
ernment Claim involves costs of defending a ‘fraud . . . or
similar proceeding’ where Rockwell was ‘found liable.’” Br.
of Rockwell at 51. Rockwell also contends that the Board
was correct in determining that the issues before it were
identical and actually litigated in the Supreme Court
action, and thus collateral estoppel applied.
    Given our interpretation of the applicable contract
provisions above, Rockwell is correct that allowability of
costs turns on whether the claim involves costs of defend-
ing a “fraud . . . or similar proceeding” where Rockwell
was “found liable.” We find that because the Supreme
Court determined that Mr. Stone was not an original
source and therefore the district court was unable to
properly exercise jurisdiction over his part of the litiga-
tion, it follows that Rockwell could not be liable for that
part of the litigation. As pointed out by the Board, “the
claims where Rockwell was found liable were not even
asserted until the amended complaint was filed.” DOE’s
argument that the “gravamen of the initial and amended
complaints was the same, i.e., Rockwell concealed from
the Government environmental problems involving un-
stable pondcrete in order to get claims paid or approved,”
may be true, Response and Reply Br. of the Secretary of
Energy at 33; however, the contracts require Rockwell be
found liable before the costs are disallowed–Rockwell
cannot be held liable for costs incurred defending against
claims brought by a plaintiff who has no standing. Ac-
cordingly, costs incurred prior to the Government’s inter-
vention are allowable reimbursements.
ENERGY   v. BOEING CO                                    18


   C. Common Defense Costs
    With regards to the claims or issues Rockwell both
won and lost after the Government’s intervention, i.e., the
“common costs,” Rockwell argues that “[w]hile the Board
correctly concluded that clause (e)(32) does not bar all
Stone defense costs, it erred in limiting Rockwell’s recov-
ery.” Br. of Rockwell at 53. Rockwell argues that “the
Board had discretion to award Rockwell all its costs . . . .
But the Board found that it lacked the power to do so, or
even apportion costs, despite Rockwell’s limited liability
in Stone.” Id. at 66.
    We agree with Rockwell that the Board has the au-
thority to apportion costs based on Rockwell’s liability in
Stone. In Abraham, we noted that
   Normally the costs of a database used for more
   than one purpose should have been apportioned in
   some manner to reflect both the allowable and
   unallowable uses. Here, however, the government
   did not argue for the apportionment of those costs,
   but rather followed an all or nothing approach,
   arguing only that these costs be found unallow-
   able in their entirety for the same reasons that it
   urged that the corporate defense costs were unal-
   lowable. Having found that the corporate defense
   costs are allowable, the database costs are simi-
   larly allowable because the government has
   waived its right to argue for apportionment.

Abraham, 326 F.3d at 1255. This language clearly con-
templates the ability of the Board, under these contract
terms, to apportion costs in certain cases. Additionally,
this ability is consistent with our limited construction of
the term “proceeding” above. To disallow such costs in
every situation where liability for fraud or similar pro-
19                                     ENERGY   v. BOEING CO


ceeding is found is too broad of a contention, encouraging
potential piecemeal litigation, judicial inefficiency, and
unfair results.
    However, we find that the Stone litigation involved a
“common core of facts” and was “based on related legal
theories.” See Hensley v. Eckerhart, 461 U.S. 424, 435
(1983). As stated by other circuits, there are circum-
stances “[w]here several claims arise out of a common
factual core or are based on related legal theories, sepa-
rating out the legal services rendered with respect to
these overlapping claims would be an exercise in futility.”
Munson v. Milwaukee Bd. of School Directors, 969 F.2d
266, 272 (7th Cir. 1992); see also Garrity v. Sununu, 752
F.2d 727, 735 (1st Cir. 1984). Here, the Board expressly
recognized that the claims at issue were interrelated and
based on the same core facts: “Counts 1 through 5 all
involved issues relating to pondcrete and saltcrete . . . .
Those core facts all supported to some degree alleged
claims for FCA violations, common law fraud, breach of
contract, payment by mistake, and unjust enrichment.”
A34. In this case, we find that because there is a common
core of facts all relating to the fraud for which Rockwell
was found liable, apportionment is inappropriate in this
case. See A491-94, Department of Justice’s Amended
Complaint.
                       CONCLUSION
    Because the Board correctly determined that costs re-
lating to claims sounding in fraud where the Government
was successful are unallowable and that costs relating to
claims where Rockwell was successful are allowable under
clause (e)(32), we AFFIRM IN PART. Because we find
that the Board had the authority to apportion costs, we
REVERSE IN PART. However, apportionment is inap-
ENERGY   v. BOEING CO                               20


propriate in this case; therefore, it is unnecessary to
remand.
    AFFIRMED-IN-PART, REVERSED-IN-PART
                        COSTS
No costs.
       NOTE: This disposition is nonprecedential.

  United States Court of Appeals
      for the Federal Circuit
               __________________________

      Steven Chu, SECRETARY OF ENERGY,
                    Appellant,

                            v.
          THE BOEING COMPANY,
   (SUCCESSOR-IN-INTEREST OF ROCKWELL
      INTERNATIONAL CORPORATION),
                  Appellee.
           -------------------------------------------------
                THE BOEING COMPANY,
(Successor-in-Interest of Rockwell International Corpora-
                                tion),
                            Appellant,

                            v.
      Steven Chu, SECRETARY OF ENERGY,
                    Appellee.
               __________________________

                    2011-1304, -1317
               __________________________

   Appeal from the Civilian Board of Contract Appeals in
Nos. 337, 338, 339, and 978, Administrative Judge R.
Anthony McCann.
              __________________________
ENERGY   v. BOEING CO                                     2


BRYSON, Circuit Judge, concurring in part and dissenting
in part.

    I agree with the court that the costs relating to fraud
claims on which the government was successful are
unallowable. And I agree that the so-called “common
costs” are not subject to apportionment. To that extent I
concur in the court’s judgment. However, I do not agree
with the Board or the court that Boeing is entitled to
recover the costs that were incurred in the fraud action
but that related to claims on which the government did
not prevail. On that issue I respectfully dissent.

    This case turns principally on the meaning of the pro-
vision referred to clause (e)(32) in the 1986 and 1989
contracts between the Department of Energy and Rock-
well International Corporation, the predecessor of the
Boeing Company. The government argues that the clause
bars the contractor from recovering costs associated with
any proceeding in which the contractor or its agents or
employees are found guilty of or liable for charges of fraud
or the like. Boeing argues that the clause is narrower and
bars recovery only of those costs associated with the
particular charges on which a finding of guilt or liability
was entered.

                             A

    Clause (e)(32) uses confusing language. It makes un-
allowable

   [c]osts incurred in defense of any civil or criminal
   fraud proceeding or similar proceeding (including
   filing of any false certification) brought by the
   Government where the Contractor, its agents or
   employees, is found liable or has pleaded nolo con-
3                                       ENERGY   v. BOEING CO


    tendere to a charge of fraud or similar proceeding
    (including filing of a false certification).

The problem is with the word “proceeding.” The ordinary
meaning of that term is a suit, action, or matter that may
comprise multiple counts or charges; it is not limited to a
single count or charge in such an action. See Rumsfeld v.
Gen. Dynamics Corp., 365 F.3d 1380, 1386 (Fed. Cir.
2004), quoting Black’s Law Dictionary. Under that ordi-
nary meaning, however, the last portion of the clause is
clumsy, to say the least. If a “proceeding” means at least
the entire action, which may comprise multiple counts or
charges, the phrase “a charge of fraud or similar proceed-
ing” is difficult to parse. In addition, the phrase “includ-
ing filing of a false certification” does not fit comfortably
in conjunction with the term “proceeding,” because filing a
false certification is not a kind of “proceeding” in the
normal sense of that word. On the other hand, defining
the term “proceeding” to mean a count or charge not only
is contrary to the ordinary meaning of the term, but also
fails to accord the word a meaning different from that of
the term “charge,” with which it is juxtaposed, leading to
a clumsy redundancy. In short, the language of the clause
is ambiguous; it presents the kind of interpretation prob-
lem as to which we must look to extraneous sources for
guidance. Fortunately, such guidance is available.

    The language found in clause (e)(32) is drawn directly
from a 1985 Act of Congress. Because the contract lan-
guage was taken almost verbatim from the statute, we
can look to evidence of the meaning of the statute in
seeking to determine the meaning of the corresponding
contract clause. See Gen. Dynamics Corp., 365 F.3d at
1385-90; Roedler v. Dep’t of Energy, 255 F.3d 1347, 1352
(Fed. Cir. 2001); Santa Fe Eng’rs, Inc. v. United States,
801 F.2d 379, 381-82 (Fed. Cir. 1986). When we examine
ENERGY   v. BOEING CO                                        4


the legislative history, background, and regulatory inter-
pretation of the 1985 statute, we find that they provide
substantial support for the government’s construction of
the contract language.

    1.  In 1982, the Defense Acquisition Regulation
(“DAR”), the predecessor to the Federal Acquisition
Regulation (“FAR”), was amended to include a “Defense of
Fraud Proceedings” provision, which rendered costs
incurred in connection with fraud proceedings unallow-
able. The provision stated:

   Costs incurred in connection with defense of any
   (i) criminal or civil investigation, grand jury pro-
   ceeding or prosecution, (ii) civil litigation, or (iii)
   suspension, debarment or other administrative
   proceedings, or any combination of the foregoing,
   brought by the Government against a contractor,
   its agent or employee, are unallowable when the
   charges, which are the subject of the investiga-
   tion, proceedings, or prosecution, involve fraud on
   the part of the contractor, its agent or employee,
   as defined in (b) below, and result in conviction
   (including conviction entered on a plea of nolo
   contendere), judgment against the contractor, its
   agent or employees, or decision to debar or sus-
   pend, or are resolved by consent or compromise.

32 C.F.R. § 15-205.52(a) (1983). The regulation defined
the term “costs” to include all expenses “incurred prior to
the commencement of the formal judicial or administra-
tive proceedings which bear a direct relationship to the
proceedings.” Id. § 15-205.52(c). The notice accompany-
ing that provision explained that it was intended to
disallow reimbursement of costs “incurred by a contractor
in the defense of criminal or civil fraud proceedings . . .
5                                       ENERGY   v. BOEING CO


when the action, brought by the Government, results in a
conviction or judgment against the contractor . . . .” 48
Fed. Reg. 3457 (Jan. 25, 1983). The following year, the
language from the DAR was adopted as part of the FAR.
48 C.F.R. § 31.205-47 (1983).

     From the plain language of the 1983 FAR provision,
which disallowed all costs incurred in connection with the
defense of any criminal, civil, or administrative proceed-
ing brought against the contractor if the charges that
were the subject of the proceeding involved fraud and
resulted in a conviction of the contractor or its agents or
employees, it is clear that the provision barred recovery of
all costs incurred in the entire criminal or civil proceeding
or action, not just those costs that were associated with or
could be attributed to a particular charge or count on
which a fraud-based judgment was entered. This court
stated as much in Brownlee v. Dyncorp, 349 F.3d 1343,
1349 (Fed. Cir. 2003), where the court wrote, “At least
since 1983, the FAR has barred the recovery of legal fees
as a cost under government contracts if those fees were
incurred in defense of a fraud proceeding that resulted in
a conviction.”1

    2. In 1985, Congress adopted legislation that had the
effect of modifying the FAR’s “Defense of Fraud Proceed-
ings” provision. As originally introduced, the Defense of
Fraud Proceedings clause in the 1985 Act disallowed costs
incurred in “[d]efense of any fraud proceeding brought by
the United States, unless the contractor is found not to be
liable in any way for the alleged fraud.” H.R. 2397, 99th

    1   The FAR applies to DOE contracts, as supple-
mented by the Department of Energy Acquisition Regula-
tion (“DEAR”).
ENERGY   v. BOEING CO                                       6


Cong., 1st Sess. (1985). In committee, that language was
modified as a matter of form to read “[c]osts incurred in
defense of any fraud proceeding brought by the United
States where the contractor is found liable for fraud or
has pleaded nolo contendere to a charge of fraud.” Full
Committee Consideration of H.R. 2419 et al.: Hearings
before the H. Comm. on Armed Services, 99th Cong., 73-74
(1985); 131 Cong. Rec. 17,104-05 (1985). Both the original
and amended forms of that proposed legislation were
unambiguous regarding the meaning of the term “pro-
ceeding”; it was clear in both versions that the provision
would disallow all costs for any investigation or litigation
that led to a finding of liability for fraud or a plea of nolo
contendere to a charge of fraud.

    During the House debate on the 1985 Act, an amend-
ment was offered to the Defense of Fraud Proceedings
provisions. The sponsor of the amendment described it as
intended to “strengthen [the provisions] considerably” and
to “strictly proscribe those instances in which defense
contractors are able to charge the American public for
their legal fees.” 131 Cong. Rec. 17108-09 (1985). That
amendment contained what ultimately became the final
text of the provisions. It made unallowable

    [c]osts incurred in defense of any civil or criminal
    fraud proceeding or similar proceeding (including
    filing of any false certification) brought by the
    United States where the contractor is found liable
    for fraud or has pleaded nolo contendere to a
    charge of fraud or similar proceeding (including
    filing of false certification).

That language, with only minor changes, was enacted.
The provision that applied to the Department of Defense
was codified at 10 U.S.C. § 2324(e)(1)(C) (Supp. V 1987),
7                                       ENERGY   v. BOEING CO


and the identical provision that applied to the Depart-
ment of Energy was codified at 42 U.S.C. § 7256a (Supp.
V 1987).

     It was the floor amendment that added the confusing
language that ultimately made its way into the contracts
at issue in this case. It is clear from the context in which
that language was added to the 1985 Act, however, that
the amendment was not intended to modify the original
language of the Defense of Fraud Proceedings provisions
in a way that would increase the scope of allowable con-
tractor costs in fraud cases. Instead, the purpose of the
amendment was the opposite: It was designed to extend
the prohibition against recovery, which had been limited
to cases of fraud, to include cases involving conduct
similar to fraud, including filing a false certification. The
legislative history supports that interpretation of the
statute, and later events would provide further evidence
for that view.

    3. The 1985 Act authorized the Secretary of Defense
and the Secretary of Energy to promulgate regulations
implementing the Defense of Fraud Proceedings provi-
sions of that Act. 99 Stat. 683, 775, codified at 10 U.S.C. §
2324(e)(2)(A) (Supp. V 1987) and 42 U.S.C. § 7256a(b)
(Supp. V 1987) (now found at 50 U.S.C. § 2781(a)(3)). In
accordance with that authorization, the pertinent FAR
provision was modified in 1986 in response to the new
statute. Only one change of substance was made in the
regulation, and that change tracked the purpose of the
floor amendment to the 1985 Act by extending the prohi-
bition on the allowance of costs incurred in proceedings
involving fraud to cover proceedings involving offenses
similar to fraud, including filing a false certification.
Thus, the pre-1985 version of the regulation referred to
proceedings “when the charges, which are the subject of
ENERGY   v. BOEING CO                                       8


the investigation, proceedings, or prosecution involve
fraud on the part of the contractor.” 32 C.F.R. § 15-
205.52(a) (1983) (emphasis added). The post-1985 version
referred to proceedings “when the charges, which are the
subject of the investigation, proceedings, or prosecution
involve fraud or similar offenses (including filing of a
false certification) on the part of the contractor.” 48 C.F.R.
§ 31.205–47 (1986) (emphasis added). From that text, it
is clear that the revised regulation continued to use the
term “proceedings” broadly, to refer to the entire case in
which fraud charges were brought, not simply the fraud
charges themselves.

    In Brownlee v. Dyncorp, 349 F.3d 1343 (Fed. Cir.
2003), this court agreed with that characterization of the
1986 FAR provision and held that the term “proceeding”
in that provision should be read broadly to render unal-
lowable all costs of the litigation, not just those attribut-
able to the count on which a conviction was entered. The
court stated: “Furthermore, contrary to the contractor’s
contention, the regulation does not simply disallow the
costs of defending the employee (which the contractor
excluded from its claim); it disallows all costs of the
proceeding, including the costs of defending the contrac-
tor, even though the contractor itself was not convicted.”
Id. at 1352.

     The language of the 1986 amendment to the FAR is
highly significant. It is the regulatory interpretation of
the statutory language in the 1985 Act. It demonstrates
that the regulatory body responsible for administering the
statute interpreted the statutory language not to have
broadened the allowability of costs in fraud proceedings,
but to have simply extended the prohibition on allowabil-
ity from cases involving fraud to cases involving fraud and
offenses similar to fraud, including filing a false certifica-
9                                      ENERGY   v. BOEING CO


tion. The Department of Energy proposed an identical
regulation, which was subsequently incorporated in the
DEAR. See 48 C.F.R. § 970.3102-20 (1987).

     This court has recognized that FAR provisions inter-
preting congressional enactments are entitled to defer-
ence under the principles of Chevron U.S.A. Inc. v.
Natural Resources Defense Council, Inc., 467 U.S. 837
(1984). See Dyncorp, 349 F.3d at 1354 (“The FAR regula-
tions are the very type of regulations that the Supreme
Court in Chevron and later cases has held should be
afforded deference.”). If a statute is ambiguous, as is
plainly true of the 1985 Act, Chevron dictates that the
interpretation of the statute by the agency charged with
its administration must be respected unless that interpre-
tation is unreasonable. The regulatory interpretation of
the statute, as reflected in the 1986 provision of the FAR
and the identical provision of the DEAR, are consistent
with the pre-1985 regulation and the legislative history of
the 1985 Act and cannot fairly be deemed unreasonable.
Thus, deference is owed to the agencies’ interpretation of
the ambiguous language of the 1985 Act. Applying that
interpretation to the corresponding contract language
requires that clause (e)(32) be construed to disallow the
costs of the entire proceeding that leads to fraud convic-
tions or findings of liability, not just the costs that are
allocable to the particular counts on which the contractor
was found guilty or liable.

    4. In 1988, Congress made two more pertinent
changes to the statutes governing the allowability of costs
relating to proceedings involving fraud and other criminal
conduct. First, in the National Defense Authorization
Act, Fiscal Year 1989, Pub. L. 100-456, 102 Stat. 1918
(1988) (“NDAA”), Congress added a provision to section
2324(e) of Title 10 that disallowed “costs incurred in
ENERGY   v. BOEING CO                                     10


connection with any civil, criminal, or administrative
action” resulting “in a determination that a contractor has
violated or failed to comply with any Federal law or
regulation” if the action resulted in a conviction (in the
case of a criminal action) or a monetary penalty and a
determination that the violation was knowing or willful
(in the case of a civil or administrative action), or a deci-
sion to debar or suspend the contractor or to terminate
the contract if the decision was based on a determination
that the violation was knowing or willful. 102 Stat. 2023-
24.

    Second, Congress enacted the Major Fraud Act, Pub.
L. 100-700, 102 Stat. 4631 (1988), a part of which embod-
ied the same prohibition that had been adopted earlier
that year in Public Law 100-456. The new statutory
language, which was codified at 10 U.S.C. § 2324(k),
largely tracked the NDAA, except that it used the term
“proceeding” in place of the term “action” throughout.
Thus, as amended, the statute rendered unallowable
those “costs incurred by a contractor in connection with
any criminal, civil, or administrative proceeding” if the
proceeding related to a violation of federal law and re-
sulted, “[i]n the case of a criminal proceeding[,]” in “a
conviction (including a conviction pursuant to a plea of
nolo contendere).” Congress’s intent to use the term
“proceeding” broadly was clear, not only from the lan-
guage of the operative provisions, but from the defini-
tional section of the statute, which stated that the term
“proceeding” “includes an investigation.” 10 U.S.C. §
2324(k)(6)(A). This court so ruled in Rumsfeld v. General
Dynamics Corp., 365 F.3d 1380, 1386 (Fed. Cir. 2004).
The court in that case held that the term “proceeding” in
section 2324(k) “includes all claims or causes of action
within a particular case,” not just a single count or claim
on which a finding of fraud has been made. Rejecting an
11                                     ENERGY   v. BOEING CO


argument similar to the argument made by Boeing in this
case, the court stated simply: “Congress could have
drafted section 2324(k) such that legal costs of a proceed-
ing are unallowable on a claim-by-claim basis; it did not.”
Id.

    There is no indication that, when Congress accorded
the term “proceeding” a broad meaning in the Major
Fraud Act, it intended for the term to have a different
meaning from the one it had in the 1985 Act at issue here.
In fact, Congress placed the two provisions together in the
same section of title 10 of the U.S. Code. Thus, the term
“proceeding” was (and still is) found in both subsections
(e) and (k) of section 2324, with subsection (e) carrying
forward the language of the 1985 Act and subsection (k)
embodying the language of the 1988 Act. It is well estab-
lished that identical words used in different parts of the
same statute are presumed to have the same meaning.
Taniguchi v. Kan Pacific Saipan, Ltd., 132 S. Ct. 1997,
2004-05 (2012); Desert Palace, Inc. v. Costa, 539 U.S. 90,
101 (2003); Richard v. United States, 677 F.3d 1141, 1147
(Fed. Cir. 2012). Boeing’s interpretation of the term
“proceeding” in the contracts, which is taken from the
identically worded language of 10 U.S.C. § 2324(e), would
require the court to construe the term “proceeding” nar-
rowly in section 2324(e) and broadly in subsection
2324(k), contrary to that presumption.

    Where all this leads is the following: The language of
the 1985 Act (and therefore the contract language that
was taken from that Act) is ambiguous. Other evidence
as to the meaning of the Act, however, all points in the
direction urged by the government: that the term “pro-
ceeding” refers to the entire matter or case at issue, not
simply to those claims or counts on which liability is
based. The FAR provisions that predated the 1985 Act
ENERGY   v. BOEING CO                                     12


used the term “proceeding” broadly. The legislative
history of the 1985 Act indicates that the amendment that
added the problematic language was intended to broaden
the scope of the unallowability provision, not to narrow it.
The post-1985 regulations implementing the 1985 Act
employed a broad meaning of the term “proceeding” as
part of the agency’s official interpretation of the statutory
language; under Chevron, that interpretation is binding
unless it is unreasonable, which it clearly is not. And in
the 1988 Major Fraud Act, Congress gave the term “pro-
ceeding” a broad definition, one that presumptively ap-
plies to the same term that is used in the portion of the
same statutory section that is at issue in this case. In
light of all these considerations, I am satisfied that the
term “proceeding,” as used in the 1985 Act and the con-
tracts at issue in this case, should be given the broad
definition urged by the government, not the narrow
definition urged by Boeing.

                             B

     The court bases its interpretation of clause (e)(32) in
part on its conclusion that a broad interpretation of that
clause would conflict with the Environmental Costs
Clause of the contracts, clause 54(d)(16). But the Board
provided a complete and convincing answer to that argu-
ment. Clause 54(c) of the contracts specifically provides
that allowable costs “shall not include the cost of any item
described as unallowable in paragraph (e) [including
clause (e)(32)].” Therefore, as the Board explained, clause
(e)(32), where it applies, “is a specific exception to the
allowability of ‘all costs’ covered by clause 54(d)(16).”

    Importantly, clause (e)(32) bars the allowance of costs
only where the proceeding involves a charge or fraud and
results in liability or conviction on a charge of fraud. The
13                                     ENERGY   v. BOEING CO


realm of potential conflict between clause (e)(32) and the
Environmental Costs Clause is therefore quite limited;
outside the context of fraud-based proceedings, clause
(e)(32) does not in any way conflict with the scope of the
Environmental Costs Clause. For that reason, the analy-
sis in this court’s decision in Abraham v. Rockwell Int’l
Corp., 326 F.3d 1242 (Fed. Cir. 2003), is not applicable
here. In that case, the court rejected the government’s
argument for the unallowability of certain costs, as the
government’s argument would have effectively limited the
Environmental Costs Clause to make it “entirely inappli-
cable to all proceedings brought under the federal envi-
ronmental laws, an area that the clause was explicitly
drafted to cover.” Id. at 1253. In this case, clause (e)(32)
would have no such sweeping effect. Instead, it would
have the far more limited effect of making the Environ-
mental Costs Clause inapplicable to actions based on
contractor fraud and resulting in the contractor’s liability
for fraud. That narrower role for clause (e)(32) is signifi-
cant; as the court in Abraham pointed out, the govern-
ment’s argument for restricting the scope of the
Environmental Costs Clause “would make sense if the
result were to partially limit the coverage of the Envi-
ronmental Costs Clause.” Id.

    Beyond that, the “conflict” rationale proves too much,
as the same conflict argument would apply to costs in-
curred on individual fraud counts on which a contractor is
found liable. After all, if the Environmental Costs Clause
covers all costs of litigating fraud claims relating to the
environment on which the contractor prevails, the clause
should extend equally to claims on which the contractor is
found liable. Thus, there is potential conflict between the
two clauses even under the narrow interpretation of the
term “proceeding” that the court endorses. For that
reason, the “conflict” argument does not provide useful
ENERGY   v. BOEING CO                                  14


guidance as to how the term “proceeding” in clause (e)(32)
should be interpreted. Because the statutory and regula-
tory history bears directly on that question and supports
the government’s interpretation of clause (e)(32), I would
accord the term “proceeding” that broader interpretation
and remand this case to the Board for reconsideration of
the allowability issue in light of that interpretation. I
therefore respectfully dissent.2




   2     The Board allowed Rockwell to recover all of its
costs that pre-dated the government’s intervention in the
Stone litigation on the ground that Rockwell was not
found liable on any of the claims that were asserted prior
to the filing of the amended complaint. Based on my
interpretation of clause (e)(32), I would not uphold the
Board’s ruling on that ground but would direct the Board
on remand to determine whether the portion of the Stone
litigation that pre-dated the government’s intervention
should be treated as a separate proceeding for purposes of
clause (e)(32) or as part of a single ongoing proceeding.
