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  1. Interesting. In about 10 years, it has only happened here about 3 times (according to those who have been here that long). So it's not nearly as common here as Vern's DoD experience suggests it is elsewhere. That being said, if it is something that is necessary for the good of the programs we are trying to effect, I'm all for it, but at what point do they open the books? We do not negotiate directly with the sub, but how can we effectively negotiate with a prime contractor if the prime does not know what is in the sub's proposal? It would seem that in order to negotiate effectively, much less manage the contract, at a certain point everyone has to be on the same (transparent) page. As a follow-up to Vern's response, 'The policy has been in effect throughout the 40 years that I have been in this business'--could you point me to the policy you reference? I cannot find it (hence my asking it here).
  2. I'm the government, so I don't necessarily 'want' anything either way, from that perspective. However, I think it's asinine for a subcontractor to expect to work side by side with a prime (including on invoices!) without disclosing cost/pricing/business-proposal-related information. But what do I know? I'd like to not have to give them this option (and therefore not have to accommodate this behavior in our system, having to do so would complicate it immensely) but wanted to see if anyone knew of a rule that I couldn't find that specifically requires us to allow this practice.
  3. Working in R&D contracting, we sometimes encounter a situation where a subcontractor does not want to submit their business proposal through the prime, for proprietary reasons. Are we obligated to accommodate this, or are we able to require the subcontractor to submit their business proposal through the prime? We are developing a system to receive proposals electronically (no more boxes of paper copies all over people's offices) and I am trying to determine if this is an option the subcontractor is entitled to (and therefore if we have to build the system to accommodate this option). I can't find an example of when this has come up. Thank you!
  4. Along similar lines, do I have the ability to approve an invoice for over my warrant amount? I know an invoice isn't an obligation, but I'm at HHS, and our warrant reads "The award and administration of contracts up to $10million, executed in accordance with all requirements of Federal law, executive order, blah blah" Looking at this, it says that I also can't administer a contract over my warrant level. Meaning that even if the mod level is under my warrant level, if the total contract value is over it, I can't so much as issue an administrative mod on the contract. Is this correct?
  5. We have a CR contract awarded in 2012 to a not-for-profit small business organization for R&D. Now, in one of the option years, the contractor is claiming that they can do a portion of the work for less if they hire a subcontractor to do that portion of the work. They are trying to charge the government for the audit of a potential subcontractor to do this work. The government did not 'request' or 'require' that the subcontractor be used--the contractor proposed it on their own. I can't find anywhere that addresses this directly (or indirectly on the facts presented--existing contract, subcontractor audit, etc). So my question is whether the government is/can be liable for the cost of auditing the potential subcontractor? The contract is subject to the HSSAR if that helps.
  6. Yes, the contractor probably should have known, or at least asked. But because it's a CR contract for R&D, the 'funded scope' is rather broadly defined. So while I normally would lay this at the contractor's feet on a 'should have known' basis, in this instance I think it is questionable at best. Additionally, the COR is notorious for doing this, despite having been told repeatedly not to, so it would be nice to have something that gave the limitations on the COR's authority teeth-otherwise why bother? (unfortunately removing the COR is a non-starter, we've tried).
  7. Right...but there is no way for either the contractor (if the gov't doesn't pay) or the gov't to hold the COR financially accountable for his actions? (or, since we are talking about the government, accountable at all)?
  8. In the event of an unauthorized commitment where the COR directed the contractor to perform the work not called for/funded by the contract (CR), where the CO doesn't feel that the commitment meets the requirements for ratification set forth in FAR 1.602©(3) and refuses to ratify, what are the options for the government and contractor? Specifically, the contractor can submit a claim or sue the government, but can the contractor take action against the COR specifically? Can the government take action against the COR, holding them liable for the amount of the unauthorized commitment? Are there any cases or examples where this has occurred?
  9. Along these lines. Are we required to have the on/off ramp provisions in the solicitation/contract? Is there anything that prevents us from, for example, opening up the competition in an effort to add to the pool of contractors without the onramp clause?
  10. Side note: this is not the first issue we have had with A-21. Does anyone know of an email address or website that we can go to to ask questions like this? Always better to get the guidance from the people who wrote the policy (in theory, anyway). The contact numbers and snail-mail address seem useless in terms of getting a question answered...
  11. I have a R&D, CR contract with an educational institution. Therefore, it is subject to OMB Circular A-21. A-21 limits to $25,000 the amount of subcontracts that the educational institution can charge F&A costs on. The contractor is using other companies to perform non-commercial work under this contract--sample testing, biological supplies and testing, that kind of thing. My office has taken the position that this is a subcontract, and therefore subject to the $25,000 limitation imposed by A-21. The institution is asserting this to be a 'vendor agreement' (or supplier contract), as they use these services on more than just this one contract, and thinks that they are properly included in the MTDC of the contract. A-21 does not distinguish between vendors and subcontractors. The contractor is relying on the fact that A-133 makes the distinction. We believe that as they thought to distinguish in A-133, the silence in A-21 is intentional and that they would both be subject to the $25,000 restriction in A-21. I know that some of this depends on the work-they are performing direct work/supplies on the contract (as opposed to a general supplier contract for pencils, for example, which someone might grab to make notes on something under the contract). So my questions are: Does the proper application of A-21 differentiate between subcontracts and vendor agreements, specifically for the purposes of G.2? In the scenerio given, would this be considered a vendor or a subcontractor? Which definition of 'vendor' or 'subcontractor' applies? Is there a ruling (GAO case, FAR clause, Court of Federal Claims case, etc) that I could look to? I've found a few things that lightly dance around the issue, but nothing that addresses it directly. The smokier the gun the better. As a side note, we asked the people who established the indirect cost rates to begin with whether they included these 'vendor agreements' in the MTDC. Their response was a mind-blowing 'your guess is as good as ours' (paraphrased). And because it is CR, the contract doesn't stipulate one way or the other (though in the future we will!)
  12. An alternative interpretation, in which there is no conflict, is that the FAR language deals with the establishment of the indirect cost rates FOR the educational institutions and the OMB circular details their applicability within the contract itself. However, when asked, Wifcon, OGC and ASI all agree that there is a conflict. Is there any merit to this interpretation?
  13. Given a conflict between the FAR and OMB Circular A-21, which one controls? Both are codified in the CFR. FAR 42.705-3(b.)(6) states that “predetermined indirect cost rates shall be applicable for a period of not more than four years. The agency shall obtain the contractor’s proposal for new predetermined rates sufficiently in advance so that the new rates, based on current data, may be promptly negotiated near the beginning of the new fiscal year or other period agreed to by the parties”. However, OMB Circular A-21(G)(7) states that “Federal agencies shall use the negotiated rates for F&A costs in effect at the time of the initial award throughout the life of the sponsored agreement. "Life" for the purpose of this subsection means each competitive segment of a project. A competitive segment is a period of years approved by the Federal funding agency at the time of the award. If negotiated rate agreements do not extend through the life of the sponsored agreement at the time of the initial award, then the negotiated rate for the last year of the sponsored agreement shall be extended through the end of the life of the sponsored agreement. Award levels for sponsored agreements may not be adjusted in future years as a result of changes in negotiated rates.”. Given a five year (one year base and four one year options) contract, at the end of four years, should the government then apply the newly negotiated indirect cost rates to the fifth year, as suggested by the FAR, or does the rate for the fourth year carry through the fifth, as suggested in A-21, here “If negotiated rate agreements do not extend through the life of the sponsored agreement at the time of the initial award, then the negotiated rate for the last year of the sponsored agreement shall be extended through the end of the life of the sponsored agreement.”. Reading the FAR, the predetermined rate agreement can’t extend through the life of a sponsored contract that lasts more than four years. Further, FAR Clause 52.216-15 (referenced by FAR 42.705-3(b.)(6)) states in part under paragraph (d), “Predetermined rate agreements in effect on the date of this contract shall be incorporated into the contract Schedule. The Contracting Officer (or cognizant Federal agency official) and Contractor shall negotiate rates for subsequent periods and execute a written indirect cost rate agreement setting forth the results.” And under paragraph (e), “Pending establishment of predetermined indirect cost rates for any fiscal year (or other period agreed to by the parties), the Contractor shall be reimbursed either at the rates fixed for the previous fiscal year (or other period) or at billing rates acceptable to the Contracting Officer (or cognizant Federal agency official), subject to appropriate adjustment when the final rates for that period are established.” The implication of this clause being that new indirect rates are negotiated each contractor fiscal year and subsequently applied to the contract. 52.216-15 also references FAR 31.3, which states that “Contracts that refer to this Subpart 31.3 for determining allowable costs under contracts with educational institutions shall be deemed to refer to, and shall have the allowability of costs determined by the contracting officer in accordance with, the revision of OMB Circular A-21 in effect on the date of the contract”. The question is, in light of seemingly conflicting guidance from the FAR and A-21, what happens to the predetermined final indirect cost rates in that fifth year (and potentially beyond)? Any advice would be appreciated.
  14. Are you suggesting we use appropriated funds to teach monkeys to use condoms?
  15. "But why is the contractor crediting the government only for the profit? It should credit the government for the entire proceeds of the sale." I'm sorry, there I mispoke. As the contractor was getting paid (cost reimbursement) for the care of the monkey, all proceeds would be profit to the contractor.
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