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Everything posted by Beantown_Contracts

  1. Section 811 of the 2018 NDAA provides a class deviation for FAR 15.408 increasing the threshold to $2m as of 01 July. This change increases the threshold for submitting certified cost or pricing data to $2m on the date of price agreement or award, whichever is later. Assuming a Prime is awarded prior to the effective date of 01 July, the Prime's contract is therefore subject to the prior threshold of $750k. Question: If a subcontractor reaches price agreement or receives award post 01 July, should the subcontractor be subject to the prior or current threshold for the requirement to submit Certified cost or pricing data? Alternatively stated, is a subcontractor subject to the mandatory flowdowns, exactly as agreed to under the Prime contract (updating of named parties notwithstanding). BC
  2. Beantown_Contracts

    Commercial Item Justification

    Retreadfed, with all due respect re: "..the bar for what is a commercial item is low...", I have to disagree based on current application of the regulations by a number of DoD entities. Despite the regulatory loosening, the acquisition staff managing one of the largest current contracts insists on demanding at least two true commercial invoices, not older than two years for the exact product number in order to successfully assert commerciality. These 'over the top' requests do not at all reflect the reality that DoD most often buys technology that is at least two (if not five, ten or more) years old once full rate production begins. Small and non-traditional government contractors that opt to provide and support legacy technology are then subject to onerous costing exercises that cannot accurately capture legacy iRAD costs. While DCMA has launched CID centers of excellence, Primes are still on the hook for determinations for their subs using the guidance from CO's noted above. Just wishing we all had one set of rules to work with across the board.
  3. Olga, Barring some unknown factors, the Contractor is out $1m. CPFF may be a low risk to the contractor, but, low risk assumes adequate accounting system and trained personnel to accurately accrue costs as well as make timely notification (75% burn) to the Government. In this case, Contractor is seemingly entitled to 100% of the funded value and not more. Beantown
  4. Beantown_Contracts

    3 Day Congressional Notification-then no award?

    JMG, thank you. To be specific, "not awarded". Period. I've never heard of a non-award once the process has hit the Congressional Notification stage. Of course, until the fully executed contract is in hand... tx BtC
  5. Has anyone actually had or heard of a contract not awarded once at the 3 day Congressional Notification stage? Researching various sources with no luck. Not looking for details, simply yes/no. Thank you in advance. BtC
  6. Beantown_Contracts

    Mandatory Flowdowns

    Agree with sjanke, but add that NDIA has published "A study of the Applicaiblity of FAR clasues to subcontracts..." includes DFARS and NFS. Provides: Title, Citation, Mandatory/Optional notation, and Remarks. Available for sale on the NDIA website. Discount if a member. Not an end all be all, and there's no replacement for learning, I do find it to be a solid resource for both sides of subcontracts as well as a training sessions. Caveat, published in 2012.
  7. Hoping that I've just tripped upon a newbie DCMA employee, but, a recent cost proposal was kicked back by the DCMA Price Analyst because it had markings such as "NOFORN" and "Controlled Unclassified". DCMA PA stated, "our systems are not secure for acceptance of proposals with these markings." None of my circle have heard of this policy change. Before I suggest that this price analyst bring in his supervisor, I wanted to reach out in case there were facts behind the statement, even if it begs questions regarding ignoring the DD254 and/or Program Protection Guide. Has anyone heard of DCMA NOT accepting proposals marked NOFORN and/or CUI? V/R, BC
  8. Beantown_Contracts

    Distribution Statement "D" on SOW and Performance Spec.

    Jeff, I pm'd you. I suggest you need to reach out to someone with strong trade compliance knowledge for a definitive answer. Did you receive 'verbal' from the gov't? Is there a TAA in place? Should there be? Also, suggest using hypotheticals, both internally and externally, when discussing possible violations. Might want to have 'off-line' discussions internally until you have a sollid answer. BC
  9. Beantown_Contracts

    Commercial Item Determination

    Bringing this string back to life, so as not to re-create, but rather expand... How about the pain felt by a small business subcontractor when proposing a Commercial Item to the Prime. Prime is rigorous (no argument here) and calls in DCMA. DCMA reviews vigorously (many hours of our staff, but that's part of the deal), and gives a blessing. The agency declines to accept DCMA approval. The agency (not just current CO) has taken the stand that any comp invoices must be no older than @2 years. (don't look for a reference in the FAR/DFAR) The insanity is that tech companies move rapidly forward in evolving products and the USG is buying the same product for upwards of 10 years due to program lifespans. If our last 'commercial' sale was 5+ years ago, that does NOT make our product any less commercial today. As mentioned above, on one hand the gov't advocates 'commercial' solutions, yet on the other is deaf to a commonsense argument. BC
  10. Posted Today, 12:56 PM It certainly seems to me that the contract clause is trumped by P.L. 96-517, the Bayh-Dole Act of 1980. Accordingly, it is a nullity when applied to universities, small businesses, or not-for-profit institutions. But then, again, I'm not a lawyer. H2H Agree w/H2H. Have been a prime w/EDU's many times with research work. Discuss thoroughly with all parties, up and downstream. Flowdown the specific subpart, and, for what it's worth, I always notify IN WRITING, the GVT Contracts lead and cc: the sponsor and /or COR. Solid communication builds longterm relationships and minimizes surprises. BC
  11. Beantown_Contracts

    Guaranteed Minimum Not Met

    Last year's story in the Post re: Guaranteed Minimums under a GSA contract. http://www.washingtonpost.com/business/on-small-business/exclusive-gsa-failed-to-pay-thousands-of-small-government-contractors-since-2008/2013/05/15/305c4422-bd93-11e2-9b09-1638acc3942e_story.html As to the current issue, if there is clearly a binding contractual obligation for a guaranteed minimum order or payment (perhaps included to induce sellers to undergo the proposal effort), the issuance of these payments is legally required before the contract is closed. No partials, no profit only, simply cut a payment to fulfill a contractual obligation. (Assuming the contractor was a going entity within the PoP and reasonably capable of performance). As to the practice of guaranteed minimums...IMHO, useage should be extremely limited. This minimum (by any other name) contradicts the standard (Comm or GVT) business practice of 'seller shall not be reimbursed for proposal costs'. BC
  12. Beantown_Contracts

    All Time Favorites

    1. What is your all time favorite book? Marine! Life of Chesty Puller 2. What is your all time favorite song or album? Nine Tonight: Bob Seger 3. What is your all time favorite movie? Once upon a time in America
  13. Beantown_Contracts

    CMBOK (NCMA's Contract Management Body of Knowledge)

    Have read the 3rd Ed. 2011. Will likely order the 4th Ed. 2013, immediately in prep for long postponed CPCM exam. Another addition to my readily available reference materials that started with my Velveteen Rabbit of reference books, Admin of Gvt Contracts, Cibinic/Nash. BC
  14. Hoping for some affirmation or clarification here re: FAR 52.215-22, 52.215-23, 31.203(i) Relationship is Prime to Sub A to Sub B. Subs A and B are Wholly-owned, separately incorporated, subsididaries of the same parent. To avoid profit-on-profit/fee-on-fee, Sub B will propose to Sub A on a FFP basis with Sub B's internal cost build up ex of profit. Sub A's FFP proposal to Prime will include profit. Note that Sub B may be >75% of Sub A's total costs. Assuming that Sub A's proposal will be >$1m, would one expect that DCAA will assert that Sub A is taking excessive profit while adding minimal value? Given that Subs A and B are same family AND that Sub A is the sole entity accruing profit, does this possibly mitigate the 'excessive profit' assertion? Alternatively, perhaps the safer route is to accrue reasonable profit at Sub B level, leaving Sub A to accrue profit, ex of the Sub B costs. Thank you in advance for your feedback.
  15. Beantown_Contracts

    Damaged Government Property

    Secaucus, you might want to leverage your DSS rep. to get the classified material off-site. Annually, our rep had us justify any item on our class inventory that wasn't tied to a current contract. In your case, we would likely submit a formal letter by certified mail to the appropriate contracting officer as well as the DCMA GPA, cc'g DSS: stating that, 'per DSS instruction to take action to remove x property from our inventory, after x date, we will disposition by certified destruction the classified item as the government has effectively abandoned the property and not responded to prior correspondence dated xxxx. Any funds received for scrap in excess of costs incurred for destruction, transfer, and storage will be submitted to the US Treasury-General Fund.' Whether or not the stated disposition actions were compliant or even lawful, the resultant actions of the GPA and/or CO quickly resolved the issue. BC
  16. H2H and Retread, Clarifications: End customer: DoD; Sub A to Prime via FFP subcontract; Your inputs are greatly appreciated in (hypothetically) correcting a legacy process that was recently inherited. BTC
  17. H2H and Retreadfed, Thank you for your feedback. H2H, "the Sub B FFP proposal to Sub A would appear to violate the requirements of 31.205-26(e).", I take it this is in response to the FFP relationship between A & B. You are therefor recommending a CR type arrangement? Makes sense. To be clear, these are separate corporations under the same parent, therefore, no 'subcontract' would be placed, in lieu of, the document would be an internal statement referencing the work and that it be CR? Is this correct. V/R, BTC.
  18. Beantown_Contracts

    Local Travel Without Travel CLIN

    RE: Local travel definition. This does not exclude the employee from being reimbursed for local travel in excess of residence and regular place of work. ie, whem traveling to a different work location, the employee may be reimbursed for the Excess miles only. Same applies if employee reports to regular workplace then must travel to a satellite location to make a repair. Note, a roundtrip from regular workplace to satellite location would be fully reimbursable, however, in line with situation noted above, if employee travels from regular workplace to satellite location to home, ONLY the miles in excess are reimbursable. Bottom line, no part of a standard commute are reimbursable.
  19. The following statement has been presented as factual re: a FFP proposal where deliverables are modified hardware: "Per FAR guidelines, and DCAA, one cannot use the program kickoff as a milestone. FAR prohibits the ordering of material, passage of time, holding of kickoff meetings, and signing of POs/Subcontracts as milestones." Milestone 1 is stated as, "Kickoff Meeting: costs incurred in support of" While I am in agreement that one may invoice for costs incurred vs. signing of POs, passage of time, etc., does this truly hold for the milestone 1 as stated above? My research is not providing a definitive answer. Thank you in advance. V/R, BC
  20. Beantown_Contracts

    Commercial Items and Technical Documentation

    In addition to the recommendations noted above, I would suggest (at a minimum), a multi-day class re: Rights in Technical Data & Computer Software. There are numerous options available via NCMA as well as public and private educational outlets. I keep a copy of one particular 500+ page course manual adjacent to my Cibinic & Nash library. I don't want to be seen as promoting one provider over another here, so please feel free to message me if you'd like further details.
  21. Beantown_Contracts

    TINA & Lack of approved accounting system

    Retreadfed, Yes, we were prepared to defend that point, however, the Specialist was focused solely on the cost of the mod. tx
  22. Background: Defense contractor is providing services and products under "Commercial" definition via FFP subcontracts. Currently, the Finance/Accounting system is not set up to accurately provide direct and indirect rates for cost plus contracting. (GL doesn't notate unallowables) An accounting type has created what are believed to be reasonably accurate DCAA-like rates. (insert reaction here) Current situation: Bidding via a prime to provide Modified versions of a Commercial item. Modification exceeds $700k (90% labor). DoD Contracts Specialist requests labor detail for cost justification. I VERY clearly & repeatedly state in both verbal and written form that we can only provide DCAA-like rates, as noted above. Since our DCAA-like rates exceed our standard published commercial labor rates by 10%+ resulting in a cost type proposal exceeding the price proposal by 10%+, the Specialist signs off. Problem: DoD Contracts Specialist requests that I sign a TINA cert. Morally, I have no issue with signing off on our FFP proposal price, based on our Commercial labor rates. Given that our DCAA-like rates were provided merely to provide a rough estimate against our commercial labor rates, the accuracy, or lack thereof, should not give me pause. Correct? Thank you. BC
  23. Beantown_Contracts

    TINA & Lack of approved accounting system

    Vern, Thank you. I believe I am on solid ground as to disclosure of pertinent facts. The key being that our FP labor proposal is truly based on current, published, commercial labor rates, which rates have truly been used for actual commercial sales. The cost comp. using so-called DCAA-like rates (full disclosure having been made re: (in)accuracy of said rates) resulted in a larger number than our FP price. I greatly appreciate your feedback. Better to ask for advice than have my ethics questioned. V/R, BC
  24. Beantown_Contracts

    TINA & Lack of approved accounting system

    Non-commercial modifications to commercial items are NOT exempt from requirement for certified cost or pricing data if they exceed the TINA threshold or 5% of the total price of the contract. (Further amended in FY 2008 NDAA to add “. . . at the time of award”). [see also FAR 15.403-1(c)(3)(iii)]
  25. Beantown_Contracts

    TINA & Lack of approved accounting system

    Vern, The original work was Commercial Item as defined in FAR Part 2.101, however, the USG later directed a modification to the Commercial item. The value of this modification exceeds the 5% threshold for "minor" modifications to a commercial item and is well in excess of 700k, thereby triggering TINA. V/R