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Posts posted by Retreadfed

  1. H2H identified the problem as one of productivity.  DCAA was actually doing more with fewer auditors ten years ago.  However, in 2008, GAO issued a report on DCAA compliance with GAGAS stating that DCAA audit files did not contain sufficient evidence to support the audit conclusions stated in audit reports.  As a result, DCAA changed its approach and now demands more and more from contractors in the way of support for costs claimed and business systems.  This leave no stone unturned approach has dramatically reduced productivity without an increase in the usefulness of audit reports to contracting officers.  In fact, there have been later GAO reports that indicate that DCAA audit reports are not useful to contracting officers because they are issued too late or cause delay in recovering money owed to the government.

  2. Justice, your fact situation is not clear.  You say you had an unexpected overrun on one order.  This was based on DCAA audit adjustments.  However, you have not said that you agree with those adjustments.  Further, you have not stated whether you are entitled to recover the alleged overrun costs.

    In regard to the order on which you had an "under-spend", this indicates that you did not incur costs on that order so that you owe the government money.  If you did not overbill the government, what is there for the contracting officer to set off  on each order? 

  3. Mezut, your post is confusing.  Can we try to clear it up a little.  You say the contract is an IDIQ contract.  Did it have a minimum value representing the government's obligation to issue orders against the contract?

    Has the government met its obligation to place orders for the minimum amount?

    What was the ordering period specified in the contract?  Was it five years or one year coinciding with the option periods?

    Was the $5M the maximum amount of services the government could order?

    Was the $5M obligated if so, was it obligated against the contract or under an order?

    Is the contract subject to the SCA?  If so, are revised wage determinations requested each time an option is exercised?

    Have any options been exercised?

  4. tgun, if the contract is a cost reimbursement contract, look at the standards for cost allowability in FAR 31.201-2 then ask yourself if the cost in question meets these tests.  Remember also, if the government wants to disallow the cost because it is unallowable, the government will have to prove that it is unallowable.  On the other hand, if the disallowance is because the cost is unreasonable using the criteria in 31.201-3, the contractor has to demonstrate that the cost is reasonable.

  5. NenaLynz, I'm a little confused about what the facts are.  You say the SIN's on the GSA schedule contract are all for services.  You also say that the affiliate without the GSA schedule contract is listed as a "participating dealer."  That seems to indicate that supplies are being provided.  Is the non-schedule holder providing supplies to the schedule holder?  If yes, are the supplies a deliverable under the specific orders?

  6. ji, I don't know what you are disagreeing with.  While bodily injury and personal property damage insurance can relieve the insured from liability to third parties, its primary purpose is to protect third parties from being financially harmed due to the negligence of the insured.  The theory behind such insurance is to protect the public from injuries arising from the operation of a dangerous instrument.

  7. ji and Joel, the OP asked about insurance on the vehicles, not insurance for coverage for operation of the vehicles.  Bodily injury and property damage coverage is usually to protect third parties.  Having such insurance does not necessarily provide coverage for damage to the vehicles that may be government property.  If the vehicles are government property, it seems to me that the liability provisions of 52.245-1 have to be considered.

  8. H2H, I think you are over analyzing the DCMA Instruction.  It does not say that contractors must come up with cost reduction initiatives.  What it says is if they do have such initiatives, are the results reflected in forward pricing rates. 

    Interestingly, the DCMA Instruction is intended to implement PGI 242.3.  The PGI is supposed to provide internal guidance to DoD personnel only.  It is not supposed to impose requirements on contractors.  Further, note that the PGI guidance applies to contract types other than cost reimbursement contracts.  Instead, it applies to all contract types except FFP and FP(EPA).  Theoretically, the PGI guidance would apply to T&M contracts for commercial items.  Additionally, the guidance is only mandatory in regard to contractors that do a minimum amount of business with DoD.  Therefore, it does not apply to all cost reimbursement contracts.

    H2H, I am sure you are familiar with DCAA operational audits where DCAA audits the economy and efficiency of a contractor's operations.  It seems to me that the cost monitoring program described in the PGI and DCMA Instruction are ACO versions of such audits.

  9. CO1559, the reasonableness cost principle would apply at the prime contract level because it is a cost reimbursement contract.  Therefore, all costs incurred by the prime must be reasonable.  On the other hand, if the subcontract is a fixed price subcontract as you have indicated, the cost principles do not apply to what the sub is entitled to be paid by the prime.  Moreover, the government does not have the right to audit the costs incurred under such a subcontract.  See FAR 52.215-2.