Old-Dog

When a contractor purchases equipment under a cost reimbursement contract the property belongs to the Government. If the contractor wants to keep the equipment they should purchase it and charge the government for their ownership cost. See FAR 45.402.

I understand the difficulty you face. Determining reasonableness is something I have to address frequently. One of the resources that I use is www.salary.com to evaluate the reasonableness of the proposed price.

I work for a prime contractor and perform audits of their subcontractors when requested. Procurement used to obtain audit services from DCAA but we were told DCAA would not support them anymore. Since then, they have contracted with my firm for the services. (Bob, I hope this is within the guidelines for posting)

For your information CPAs in Washington state are required to participate in the AICPA peer review program. Reviewing CPA engagements and work papers are not within DCAA's purview.

Is major overhaul an allowable element of construction equipment ownership cost?

Department of Energy uses the term "Force account work" in DEAR 915.404-4-71-5. What is "Force account work"

Thanks, I appreciate your assistance.

According to FAR 15.403-4 the requirement for certified cost or pricing data does not apply when unrelated and separately priced changes for which certified cost or pricing data would not otherwise be required are included for administrative convenience in the same modification. I am having difficulty in determining whether or not several change orders included in a modification are related or not. Does anyone know how I can determine if the change orders are related?

Actually what I wanted to know is whether or not cost paid for duplicate home owners cost, to an employee that has relocated but has not been able to sell his house at his former job location, is allowable in accordance with FAR 31.205-35. The time limit for selling the house has expired.

According to FAR 31.205-35 certain costs relating to the sale of a residence at a former location is reimbursable up to 14% of the sales price. What happens when the employee can not sale the residence (it has been on the market for 2 years) due to the ecomony but has been reimbursed for duplicate home owners costs. My opinion is that all costs that were paid to the employee and covered under the 14% limitation are unallowable.

Basically, until it is overturned during appeals, it must be repaid. The certifying officer can be personaly held accountable. Therefore, he/she would request Treasury to recover the funds. See below from 31 CFR Ch. II (7?1?04 Edition): ? 285.12 Transfer of debts to Treasury for collection. (a) Definitions. For purposes of this section: Agency means a department, agency, court, court administrative office, or instrumentality in the executive, judicial, or legislative branch of the Federal Government, including government corporations. Creditor agency means any Federal agency that is owed a debt. Debt means any amount of money, funds or property that has been determined by an appropriate official of the Federal government to be owed to the United States by a person. As used in this section, the term ??debt?? does not include debts arising under the Internal Revenue Code of 1986. Debt collection center means an agency or a unit or subagency within an agency that has been designated by the Secretary of the Treasury to collect debt owed to the United States. FMS is a debt collection center. FMS means the Financial Management Service, a bureau of the Department of the Treasury. Person means an individual, corporation, partnership, association, organization, State or local government, or any other type of entity other than a Federal agency. Secretary means the Secretary of the Treasury. ( In general. Cross-servicing means that FMS or another debt collection center is taking appropriate debt collection action on behalf of one or more Federal agencies or a unit or subagency thereof. © Mandatory transfer of debts to FMS. (1) Except as set forth in paragraph (d) of this section, a creditor agency shall transfer any debt that is more than 180 days delinquent to FMS for debt collection services. For accounting and reporting purposes, the debt remains on the books and records of the agency which transferred the debt.

A prime contractor hires a new employee from a distance greater than 50 miles away and pays relocation costs as part of the recruitment. As part of the process the employee is required to sign a form including the following statement: "I acknowledge that all monies advanced to me or paid on my behalf by the ?Company? in connection with the relocation of my household, including moving, transportation, and other personal expenses, constitute a loan. Further, I understand that repayment of any such advances so made is required only if I voluntarily terminate my employment with the Company including termination for ?cause? within twelve months from the reporting date of an assignment. If my employment on an assignment is terminated within twelve months of my reporting date because of illness, long-term disability, or death, no repayment of such relocation advances will be required. "After 6 months the employee does not work out and is terminated. The prime contractor asks the former employee for repayment; however, the former employee is not able to repay the costs. Are these costs now considered to be "Bad Debt" under FAR 31.205?

If the modification results in a cumulative change in excess of $650,000, the answer is yes.

It appears to me that the agency with the procurement funds should pay. I suggest review of the topic in GAO's Appropriations Law Volume I. Additionally, it is my opinion, that because of the bone fide need rule, the payment should be paid from the 2010 funds if that was the year that GAO sustained the protest. Prior to GAO's decision there was no obligation.

You need to keep in mind that the $650k are based on the total of the change. If the mod included a reduction of $500k and an increase of $200k the total would exceed the $650 and require a certificate.

What is the company buying from the affialiated company? Is is something with an established market price?

If a prime contractor has a cost plus award fee contract and some of their employees comitted fraud (submitted false documents) which resulted in losses to the prime, is that loss reimbursable by the government?

I have seen instances where the government did not allow foreign nationals access to facilities and systems because of security concerns.

What is the value of the subcontract?

I have seen contractors hire replacements into non-key positions until approval by the CO. Of course there are risks.

Why would you terminate the contract instead of just not placing any additional orders against it, and let it run its term?

This is a common problem. Often contractors believe that they have commercial prices, when they don't. It appears that you may be confusing two terms, Cost or Pricing Data and Cost Accounting Standards. Cost accounting standards do not apply to all businesses. For example, small businesses are exempt. However, Cost or Pricing data is the factual information that the company used to develop the proposal (there are better definitions posted here and in the FAR). Your answer may reside in the FAR provision below. 15.403-1 Prohibition on obtaining cost or pricing data (10 U.S.C. 2306a and 41 U.S.C. 254b). (a) Cost or pricing data shall not be obtained for acquisitions at or below the simplified acquisition threshold. ( Exceptions to cost or pricing data requirements. The contracting officer shall not require submission of cost or pricing data to support any action (contracts, subcontracts, or modifications) (but may require information other than cost or pricing data to support a determination of price reasonableness or cost realism)? (1) When the contracting officer determines that prices agreed upon are based on adequate price competition (see standards in paragraph ©(1) of this subsection); (2) When the contracting officer determines that prices agreed upon are based on prices set by law or regulation (see standards in paragraph ©(2) of this subsection); (3) When a commercial item is being acquired (see standards in paragraph ©(3) of this subsection); (4) When a waiver has been granted (see standards in paragraph ©(4) of this subsection); or (5) When modifying a contract or subcontract for commercial items (see standards in paragraph ©(3) of this subsection).