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About Retreadfed

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  1. 490, if you have an FFP contract, I assume that FAR 52.232-1 is in the contract. If it is, have you read it? That tells you generally what you are entitled to be paid under an FFP contract. In the absence of another clause in the contract that is a deviation from 52.232-1, I think that clause is pretty clear about your payment rights.
  2. 490, do your concerns about an audit relate to an audit of your company or an audit of the government's administration of the contract? If the former, what clause in your contract gives the government the right to audit you in this circumstance?
  3. SPS/PD2

    Boof and Desparado, would you have objections to allowing large businesses to draft contracts when the contractor is a sole source? As for including the wrong clauses in contracts, in my experience, it is a common occurrence now with contracting officers. When this is brought to the contracting officer's attention, the common response is if the clause doesn't belong in the contract it will be self deleting, a reverse Christian Doctrine.
  4. Title 48: e-CFR

    The CAS are a big headache in my opinion. 41 US.C. 1502 requires the regulations promulgated by the CASB to be incorporated into the FAR. As such, when the CASB does so and states that it is amending FAR Part 99, this seems to be consistent with what the statute requires instead of including them in Chapter 99 as part of the FAR System. Why the disconnect between the FR and CFR remains a mystery.
  5. Title 48: e-CFR

    Interesting. When the CASB publishes a final rule in the FR, the FR identifies the change as being made to 48 CFR Part 99. See, for example
  6. Making the FAR Workable

    Another issue is that what is printed in the FR does not necessarily get incorporated into the CFR. Instead, the agency promulgating a rule that is published in the FR also has to provide that information to the CFR for publication there. Prime example is FAR Part 99 which is to include the rules of the Cost Accounting Standards Board and the CAS. The CASB publishes its rules and the CAS, including changes to them, in the FR for public comment then publishes the final rule in the FR. However, for some reason, the CASB does not provide that information for publication in the CFR. That is why 48 CFR 99 is blank. Finally, don't get me started on DCAA's promulgation of its Contract Audit Manual (CAM) which is neither published in the FR or CFR although it is largely anything but internal guidance and definitely has an administrative and cost impact on contractors.
  7. UK Single Source Contract Regulations

    H2H, you must be lucky on this one. I don't have any insight into what, if anything DoD may have in mind on this. Unless there are U.S. appropriated funds involved, or the UK contract is in support of a US/UK/NATO program, DoD probably will not have an interest in the UK contract. On the other hand, the State Department might if the item sought under the UK contract is covered by the ITAR. That would be a matter between the contractor and State. As for DCAA, because of section 893 in the 2016 NDAA, I doubt it will be doing any auditing of US companies receiving UK contracts.
  8. Todd, in regard to your last post, we need to start with the realization that the SCA adjustment is not an equitable adjustment under which a contractor gets a profit adjustment. Instead, it is a cost adjustment. The result is that if a new WD increases the contractor's costs, the profit margin will decrease when the SCA adjustment is made. As concerns, the deprivation of increased profits through efficiencies if the SCA adjustment is based upon actual hours worked, here is how that works if I understand your adjustment methodology. Let us assume that a contract is priced on the basis of 1,000 hours for a base period of one year and 1,000 for an option period. The hourly rate is $20 in wages and $2 in profit. This results in an annual price of $22,000. If the contractor realizes an efficiency and performs the first year using 900 hours, the contractor still receives the $22,000 price and realizes an additional profit of $2,200 in addition to the anticipated $2,000. For the option period, wages will increase $.20 and hour to $20.20. This results in wages of $20,200 dollars if 1,000 hours is used for the adjustment and an adjusted price of $22,200, leaving the contractor with the same negotiated profit of $2,000. However, if the contractor maintains the same efficiencies it did in the base year, it will avoid paying $2,020 in wages, thus realizing this amount as additional profit since it will be paid that $2,020 plus the original profit of $2,000. On the other hand, if the adjustment is based on 900 hours, the anticipated wage costs for the option year would be $18,180. Because this is less than the $20,000 for the base year, no adjustment is made for increased wages, instead a reduction of $1,820 would be made and the price for the option period would be $20,180. Have I misinterpreted your position?
  9. Basing a price adjustment on the actual hours worked in the previous period has some surface appeal, but presents several problems based on the concept of a firm fixed price contract as Vern stated. For example, if the contractor proposed 1,000 hours of labor but expended 1,100, I doubt many contracting officers would be willing to base a price adjustment on the 1,100 instead of the 1,000. To do so would shift a substantial portion of the cost risk in an FFP contract from the contractor to the government. Similarly, if the contractor is prevented from working during a portion of the prior period such as by a government shutdown or a stop work order, that would distort the actual hours needed to do the work and could result in an injustice to the contractor. Finally, in an FFP contract, if the contractor finds a more efficient way of performing the contract so that its cost of performance is less than anticipated, the contractor generally realizes an increase in profit. If the cost savings are generated by a reduction in the number of hours used, basing the price adjustment on the actual hours from the prior period would deprive the contractor of the profits it earned by generating cost savings.
  10. Vern, I completely agree that 52.222-43 and the DOL regulations concerning price adjustments are confusing. The lack of uniform guidance in the FAR or DOL regulations has resulted in price adjustments being done in a "wild west" manner. I have seen various contracting offices use three different methods of computing the adjustment, an adjustment based on the hours initially proposed by the contractor and accepted by the government in pricing the contract, the number of hours actually worked in the previous period, and an estimate of hours to be worked in the coming period. In fact, I had one occasion where different contracting officers in the same contracting office used different methods. My own view is consistent with your conclusion stated in your last post.
  11. Vern, in regard to your last post, the Price Adjustment clause tells us how to compute the hourly rate adjustment. However, it does not tell us what that adjustment is to be multiplied by to compute the price adjustment. My research indicates that the DOL SCA regulations do not tell us that either. I also have not been able to find any court or board decision that gives us the answer. Some agencies, such as the Air Force and Navy have published guides for making the price adjustment, but they are only interpretive guidelines and are not regulations and have no effect beyond the agency that published them. Which leads to the question as to whether you have found any definitive guidance on how to compute the hours by which the hourly adjustment is to be multiplied to calculate the price adjustment?
  12. Although neither the FAR nor DoL regulations say how to compute price adjustments under FAR 52.222-43, many agencies have issued guidance on this. The ones with which I am familiar state that the adjustment should be based upon the number of hours that are anticipated to be needed to perform the contract in the coming period. This would also seem to apply to labor categories as well since hours for unneeded labor categories would not be included in the price adjustment calculation. Thus, this seems to be a point of negotiation concerning the price adjustment. If the agency and contractor can agree that the hours relating to the added labor categories are not necessary for performance in the upcoming period, they would not be included in the price adjustment. On the other hand, if the contractor can convince you that the added labor categories are needed, they should be included in the price adjustment.
  13. Legal, if you read FAR 52.222-41 and 52.222-43, why would the contractor not be permitted to get the price adjustment in regard to the labor categories it did not propose? If it did not get the adjustment, would you also concede that the contractor does not have to pay the wages and fringe benefits called for by the WD for those categories?
  14. Note that if you hire this individual under 5 U.S.C. 3109, (s)he becomes a temporary or intermittent government employee and you do not enter into a contract under the FAR to obtain his/her services.
  15. If this person is going to be an expert witness, have you thought about using the authority granted by 5 U.S.C. 3109 to hire an expert witness under a personal services contract?