Finance Expert’s Testimony on Corporate Ethics Excluded
Posted on January 19, 2026 by Expert Witness Profiler
This case arises from Fluor’s performance under LOGCAP IV, Task Order 0005 (“TO5”), under which Fluor provided logistics and support services to U.S. military operations in Afghanistan. As a cost-reimbursable contract, TO5 was subject to oversight by multiple Government entities, including the Defense Contract Management Agency (“DCMA”) and the Defense Contract Audit Agency (“DCAA”).
As part of that oversight, DCMA conducted periodic Property Management System Analyses, or Property Management System Analysis (“PMSAs”), to assess whether Fluor’s property management system complied with applicable contractual and regulatory requirements. PMSAs evaluate the design and operation of a contractor’s system and may result in findings, corrective action requests, or system approval determinations. PMSAs do not evaluate individual claims for payment and are not designed to function as fraud-detection mechanisms.
In addition to Government oversight, Fluor conducted internal audits and assessments related to its property and materials management practices and communicated with Government officials regarding performance issues during TO5.
Relators alleged that Fluor failed to disclose material deficiencies in its property and materials management practices, misrepresented the adequacy of its systems, and improperly billed the Government under TO5.
Relators retained Dr. Dov S. Zakheim to offer expert testimony regarding Department of Defense financial oversight, acquisition practices, and the operation and limitations of Government review mechanisms in contingency environments.
Finance Expert Witness
Dr. Dov S. Zakheim has extensive experience with defense acquisition, financial management, and wartime contracting oversight.
Zakheim served as Under Secretary of Defense (Comptroller) and Chief Financial Officer from 2001 to 2004 and later served as the Department of Defense’s Civilian Coordinator for Afghanistan and as a commissioner on the Congressionally mandated Commission on Wartime Contracting in Iraq and Afghanistan.
Discussion by the Court
A. Qualifications
The parties’ dispute concerns not Zakheim’s senior government service, but the extent to which that experience supplies specialized expertise for the particular subjects addressed in his proffered opinions.
Fluor argued that Zakheim lacked specialized knowledge and experience in the day-to-day administration of Government property requirements, including the conduct of PMSAs and DCMA property administration.
For purposes of Rule 702(a), the Court found that Zakheim’s education and experience at senior levels of the Department of Defense qualify him to provide experience-based testimony regarding (1) the structure and objectives of DoD oversight mechanisms in contingency environments, (2) the general roles of oversight entities within DoD, and (3) the practical constraints such entities may face in wartime settings. Zakheim also stated that he reviewed a substantial body of case materials, including DCMA PMSA reports, internal audits, corrective action plans, and contemporaneous correspondence.
Accordingly, the Court concluded that Zakheim satisfied Rule 702’s threshold “qualification” requirement for the limited purpose of offering experience-based testimony within the foregoing bounds.
B. Scope, Reliability, and Fit
1. Permissible Experience-Based Testimony
Fluor argued that Zakheim’s report is largely an advocacy narrative that does not employ a reliable methodology and did not assist the jury because jurors are capable of reading the documents for themselves.
The Court agreed that certain general, experience-based testimony is both reliable and helpful. Zakheim may testify, in general terms, regarding the purpose and practical limitations of Government oversight mechanisms in contingency environments—including that PMSAs are system-level reviews, may rely on sampling, are affected by resource and operational constraints, and are not designed as fraud-detection tools—and why the existence of PMSAs finding a system “adequate” does not, standing alone, foreclose factual disputes about what was occurring internally or what information was (or was not) disclosed.
At the same time, the Court emphasized the limits of this ruling. To the extent Zakheim’s testimony becomes a document-by-document narrative offered to argue what happened or to urge the jury to adopt Relators’ factual inferences, it is not considered admissible expert testimony.
2. Impermissible opinions regarding intent, credibility, and concealment
Fluor argued that Zakheim’s report and testimony go beyond permissible expert context and instead offer conclusions that, in substance, attribute dishonest intent, concealment, or deception to Fluor based on his interpretation of internal documents.
The Court agreed with Fluor and held that Zakheim may not testify that Fluor acted dishonestly or deceptively, engaged in a cover-up, concealed information, lacked integrity, or intentionally misled Government officials. Nor may he offer expert opinions framed as conclusions about Fluor’s motive, intent, credibility, or corporate ethics.
However, this limitation does not preclude Zakheim from identifying categories of information reflected in the record that, if credited by the jury, would have placed a contractor on notice of operational or compliance issues, or from explaining why such information would be significant to senior Department of Defense officials. The line is crossed, however, where the testimony moves from describing the existence or significance of information to directing the jury to draw conclusions about Fluor’s honesty, intent, or credibility.
3. Counterfactual Predictions of Government Action and Legal Conclusions
Fluor also challenged Zakheim’s opinions regarding what DCMA, DCAA, an Award Fee Evaluation Board, an Inspector General, or suspension and debarment officials would have done had they possessed additional information, including assertions that the Government would have disapproved Fluor’s business systems, imposed financial penalties, denied or clawed back award fees, or pursued suspension or debarment.
The Court found that Zakheim may, at a general level, describe the existence and purpose of Government oversight and response mechanisms, including that contractors are subject to system reviews and that corrective-action and enforcement processes exist. He may also explain why integrity, candor, and accurate reporting can matter to senior Government officials.
However, Zakheim may not opine that particular Government actors would have reached different outcomes in this case, exercised their discretion in a specific manner, or imposed particular contractual, regulatory, or financial consequences had they known additional information. Such testimony consists of speculative counterfactual predictions that depend on discretionary, multi-factor decision-making and is not supported by an articulated, reliable method for forecasting how the Government would have acted on this record.
For the same reasons, Zakheim may not offer legal conclusions regarding what the contract or regulations require or instruct the jury on what legal or contractual consequences should follow from a given set of facts. He may describe processes in general terms, but he may not apply those processes to declare the proper outcome in this case. This limitation applies regardless of whether such opinions are framed as what the Government “would have done,” “likely would have done,” or “typically does.” Testimony describing the existence of oversight mechanisms or the factors such mechanisms may consider is permissible; testimony that applies those processes to declare the proper or expected outcome in this case is not.
C. Rule 403
Fluor separately sought to exclude, under Rule 403, narrative testimony concerning violent incidents in Afghanistan, including references to a suicide bombing and related loss of life. Fluor argued that such testimony had minimal probative value to the claims and defenses being tried, would invite a collateral mini-trial over a tragic event, and created a substantial risk of unfair prejudice and jury distraction.
The Court agreed that detailed testimony about violent events—particularly where the proffer would invite the jury to attribute casualties to Fluor or to litigate the causes and responsibility for the attack—poses a substantial risk of inflaming the jury and diverting attention from the elements the jury must decide in this False Claims Act case.
Accordingly, Zakheim may testify in general terms regarding the operational challenges of contingency environments to the extent that such context informs the limitations of oversight mechanisms. But he may not offer detailed or emotionally charged accounts of violent incidents, and he may not opine—directly or by implication—that Fluor’s alleged property-management practices “caused” such incidents or “cost lives.”
D. Summary of Rulings and Trial Limitations
The Court summarizes its rulings regarding Zakheim’s testimony as follows:
1. Permitted Testimony
Zakheim may offer experience-based testimony, grounded in his senior Department of Defense service, concerning:
- the structure, purpose, and general limitations of Government oversight mechanisms in contingency environments, including PMSAs;
- the effect of wartime conditions, resource constraints, and sampling practices on what such oversight mechanisms are likely to detect; and
- why the existence of PMSAs or other Government reviews finding a system “adequate” does not, standing alone, resolve factual disputes concerning internal deficiencies or disclosures.
2. Excluded testimony—intent, credibility, and ethics
Zakheim may not testify that Fluor acted dishonestly, deceptively, or with intent to mislead; that it “hid” or “covered up” information; that it lacked integrity; or that it engaged in fraud. He may not offer expert opinions regarding Fluor’s state of mind, motive, credibility, or corporate ethics, whether explicitly or through loaded characterizations or rhetorical framing.
3. Excluded testimony—counterfactual Government action and consequences
Zakheim may not state that DCMA, DCAA, an Award Fee Evaluation Board, an Inspector General, or suspension/debarment officials would have taken specific actions had they known additional information, including that they would have altered PMSA results, disapproved Fluor’s systems, imposed particular financial consequences, denied or clawed back award fees, or suspended or debarred Fluor. Such counterfactual predictions and legal conclusions are speculative and impermissible. These exclusions apply to the substance of the opinions, not merely their phrasing. Testimony that, in effect, predicts or declares Government decision-making outcomes is inadmissible regardless of whether it is presented as a general tendency, hypothetical scenario, or illustrative example.
4. Limit on narrative fact summaries
Zakheim may not present a document-by-document factual narrative or select and characterize record evidence in a manner that effectively argues Relators’ version of events under the guise of expert testimony. To the extent the underlying documents are relevant, they may be presented through fact witnesses or admitted into evidence directly. Expert testimony must add specialized context rather than merely repackage facts for advocacy.
5. Rule 403 Limitations
Zakheim may testify generally about the challenges of operating in contingency environments, so far as that context bears on oversight limitations. He may not offer detailed, graphic, or emotionally charged testimony regarding violent incidents, including suicide bombings, nor may he state that Fluor’s alleged conduct caused such incidents or resulted in loss of life.
6. Preservation of Objections and Trial Management
The Court will not permit excluded opinions to be introduced through incremental questioning or cumulative context. That said, these rulings do not foreclose contemporaneous objections at trial where testimony exceeds the bounds set forth above. The Court will address any close questions outside the presence of the jury as necessary to ensure compliance with Rules 702 and 403.
Held
The Court granted in part and denied in part the Defendants Fluor Corporation, Inc., and Fluor Intercontinental, Inc.’s motion to exclude the testimony of Relators’ expert Dov S. Zakheim .
Key Takeaway
Rule 702 does not permit expert testimony that directly, or in practical effect, instructs the jury to conclude that a party acted dishonestly, deceptively, or with intent to mislead, or that it concealed information from the Government.
Such determinations depend on credibility and intent assessments reserved for the jury and are not the product of a reliable expert application of specialized knowledge.
Please refer to the blog previously published about this case:
Logistics Expert’s Fraud-Related Opinions Excluded
Case Details:
| Case Caption: | United States ex rel. Charles R. Shepherd & Danny V. Rude |
| Docket Number: | 6:13cv2428 |
| Court Name: | United States District Court for the District of South Carolina, Greenville Division |
| Order Date: | January 14, 2026 |
