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Everything posted by Retreadfed

  1. Retreadfed

    Truth Decay

    All of this discussion reminds me of the statement we hear repeated frequently that we are all entitled to our opinions, but we are not entitled to our own facts. That statement may or may not be true. Consider this anecdote: Bill and Sam run a race in which Bill beats Sam. In Bill's version, Sam came in last. In Sam's version, he came in second. Which, if either, is true and the other false?
  2. Thanks for the clarification. Of course, the language you quoted is from DFARS 252.244-7001. Thus, this is a contractual requirement under the contracts in which that clause is inserted. Moreover, it only deals with surveillance of 1st tier subs. It does not go to second tier subs. Therefore, this language would not impose any obligations on a prime contractor in regard to a 2nd tier sub. Also, because this is only a DFARS clause, it has no application to contractors who do not do business with DoD.
  3. I agree with Vern. Isn't the real question in regard to certified cost or pricing data whether the IOT is a subcontract that requires truthful cost or pricing data unless an exception applies? The definition of subcontract in 15.401 says a subcontract includes IOT of commercial items. It does not mention IOTs in general.
  4. I don't know what this means. Can you clarify?
  5. Neil, please see the ASBCA decision at http://www.asbca.mil/Decisions/2016/59508, 59509 Lockheed Martin Integrated Systems, Inc. 12.20.16.pdf. In light of this decision, what obligation does a prime contractor have in regard to 42.202(e)(2)?
  6. Sun$hine, you did not state whether the contract at issue is subject to the Service Contract Act and if it is whether the 1st tier sub and 2nd tier subs are also subject to the SCA. If they are, you, as the prime, and each subcontractor can be held jointly and severaly liable for non-payment of required wages and fringe benefits. In addition, the Depart of Labor can propose each of you for suspension and debarment for the non-payment.
  7. Retreadfed

    Mod Awarded in Error

    Which probably means that it has incurred costs in performing the extended contract that it will want to recover.
  8. Retreadfed

    Mod Awarded in Error

    Powerbab, is the contractor in the extended period now or is it still performing within the original contract POP?
  9. Vern, I could not agree more with you. In my experience, many government contracting folks believe a contractor must base its price on the cost or pricing data the contractor submits to the government. Of course that is incorrect. As a DCAA auditor once testified in a deposition, the contractor can base its price on the square root of the distance to the moon if it wants to.
  10. In regard to my earlier post and H2H's, see FAR 15.403-1(c)(3).
  11. Sunnyo, by chance is effort under an SBA approved mentor-protégé arrangement what you are talking about?
  12. Brian, is your concern only with the NRE? If it is, what additional information are you asking for? It is possible that what the contractor is offering is all that it has for the NRE since this is likely a one off event. By the way, are you treating the NRE design as a commercial item? If you look closely at it, it may not be. In that case, you could have a separate CLIN in the contract for the non-commercial NRE and require certified cost or pricing data for that effort. Just a thought without knowing more than what you have posted.
  13. Vern, this is what I was talking about when I mentioned an indemnity provision. I am well aware of what a bailment is.
  14. Retreadfed

    Process of Excluding Small Businesses

    flitzer, are you a government employee, and if so, what is your job series?
  15. Vern, in regard to your ADA question, it seems to me that what Neil was talking about was a form of indemnity. Without going back and completely researching this issue, my recollection is that GAO has held that agencies do not need statutory authority, such as P.L. 85-804, in order to use appropriated funds to indemnify a contractor against specified loses. Instead, they can do so as long as the indemnification is not open ended and is limited by available funds. For an interesting GAO decision on bailments see, https://www.gao.gov/products/447483#mt=e-report
  16. Retreadfed

    Revenue Recognition

    H2H is correct. There is no requirement that FAR accounting concepts comply with GAAP. However, the FAR, including the CAS, generally complies with GAAP in regard to cost accounting. It does not contain any guidance on revenue recognition.
  17. Retreadfed

    Multiple Award IDIQ Small Business rerepresentation due to novation

    I agree with Vern's analysis. !3 CFR 121.404(g)(4) and FAR 52.219-28 do not prohibit an agency from issuing awards under a set aside IDIQ contract to a contractor that is no longer small. Under single award IDIQ contracts, in my experience, the agency merely stops issuing orders to such a contractor, terminates the contract for convenience or does not exercise the next option. Termination for convenience or not exercising an option appear to be steps that the SBA encourages agencies to take in situations such as those described by the OP. See 13 CFR 125.2(e)(2)(iii) where the use of an "off ramp" in multiple award set aside IDIQ contracts is discussed. The OP posed a second question in regard to the need to follow the rule of two when issuing orders against a multiple award IDIQ contract that has been set aside. I do not see any requirement for an agency to conduct a rule of two analysis in regard to orders issued under a set aside multiple award IDIQ contract. The rule of two analysis was already conducted in regard to award of the contract. I do not see a requirement to conduct a second rule of two analysis before issuing orders under such a contract. The OP also brought up FAR 16.505. That section requires multiple award IDIQ contracts to describe the procedures that will be used to award orders under them. If those procedures are not followed, a contractor adversely affected by this action can file a claim under the Disputes clause of the contract challenging the non-compliance by the agency.
  18. Retreadfed

    Multiple Award IDIQ Small Business rerepresentation due to novation

    Is FAR 52.219-28 in the contract and if it is has the acquired concern complied with the recertification requirements? In that case, as Vern pointed out, 13 CFR 121.404(g) specifically (g)(4) comes into play.
  19. JAB, we do not know is in your prime contract or subcontract. Therefore, we cannot speak with specificity to your situation. However, assuming your contract contains FAR 52.249-6, and the termination was accomplished under that clause, you would be required to terminate your subcontract and reach a settlement with the subcontractor. See FAR 52.249-6(c)(3) and (6). This would be an allowable cost that is allocable to the terminated contract. The question is whether the agreed amount would be reasonable. If not, you still should be able to recover some part of the agreed amount. Privity of contract between the government and subcontractor is irrelevant to a prime's recovery of subcontract settlement costs under a T4C.
  20. Sunnyo, not necessarily. The hourly rate has to be priced so that the contractor makes a profit on an hour of labor. There is no guarantee that the contractor will actually make a profit on each hour of labor. In fact, it is possible for the contractor to lose money on a T&M contract that is not properly priced. By the way, you have not told us how your subcontract will be priced. Is it also a T&M contract or is it priced differently?
  21. If revenue means G&A base costs, that is a poor expression of what these terms mean. Revenue is income while costs are economic sacrifices. In other words, they are reverse concepts.
  22. Retreadfed

    government recovery

    In addition to what Vern wrote, unless the contractor and government entered into a deferment agreement, the government could collect the debt through offset on any contracts the contractor has with the government that do not include a no offset provision.
  23. Justice1, how did the additional expense cause your indirect rates to go up? Indirect cost rates usually work in the inverse to direct costs. Thus, if direct costs go up, indirect costs usually go down. Indirect cost rates should not be affected by revenue since they are based on costs, both direct and indirect.
  24. Retreadfed

    Invoicing for unworked hours under a FFP TO

    Jamaal, in answer to your question to me, they are not relying on any authority. They simply look at the clauses that are required for an FFP contract and include them as well as 52.212-4, even if the contract is only for commercial items. In my view, this is done because the contracting officer does not know what (s)he is doing, particularly in regard to contracting for commercial items. In regard to which clause controls an action, I was involved in a situation a little over a year ago where a contract for commercial items contained 52.212-4 and 52.249-2. The contracting officer terminated the contract using the authority of 52.249-2. A dispute over the termination settlement proposal was appealed to the responsible appeals board where it was settled through mediation conducted by a board judge. At no time did the government attempt to argue that 52.212-4 was controlling and that it was improper to rely on 52.249-2. Further, the judge did not raise this as an issue in the mediation.
  25. Have you read FAR 1.102(d) and 1.102-4(e)?