Retreadfed

eriand2, are you saying that when an option is exercised a new contract is formed?

52.222-41 is a mandatory flow down clause and requires the prime and subcontractor to pay their SCA covered employees not less than the wages and fringe benefits required by any WD attached to the contract. It also states that the wages and fringe benefits are "subject to adjustment after 1 year and not less often than once every 2 years, under wage determinations issued by the Wage and Hour Division." It would seem that a reasonable amount for the government to reimburse the prime would be adjustments at the subcontract level that are consistent with adjustments made to wages and fringe benefits as WD's become applicable to the prie contract.

BR549, do the prime contract and subcontracts contain 52.222-41?

You are correct that 52.222-43 is not to be used in cost reimbursement contracts, but why do you think offerors should propose escalation and escalation of what?

One thing to remember is that the ITAR protects certain products and data from being exported withkout the proper authorization. For data, an export occurs when an unauthorized individual has access to it. That can occur in the U.S. as well as oversees. There is a university professor who is doing 3 years in prison for permitting foreign students to do work with ITAR protected data although the data never left the U.S.

If you do not exercise an option for a contractor that has submitted at least one proposal for a TO, would that not trigger the obligation to pay that contractor the minimum amount based on the language of the clause you quoted?

As H2H alluded to earlier, the problem is the auditors dictating contract terms to the contracting officer.

Why are you having two separate entries for the prime's subcontract costs? The fee a subcontractor receives is a cost to the prime contractor, just as subcontractor labor or material is.

To go back to Joel's question, what difference does it make as to which paragraph from the definition is applicable? Is there a questiion as to whether the services are commercial services? As ji20874 indicated, there is overlap between (5) and (6) and they are not mutually exclusive.

Lets look at it this way. A contractor or subcontractor has no inherent obligation to submit an incurred cost proposal. They only have to do so if there is a clause in the (sub)contract requiring a submission. The only FAR clause that requires establishment of final indirect cost rates is the ACP clause, 52.216-7. If your subcontractor has any prime contract with that clause in it, the government will establish final indirect cost rates for that company. If the subcontractor does not have a prime contract with the clause in it, you, as the prime will have to demonstrate to the government that the costs you claim are allowable. This includes indirect costs you have paid to your subcontractors. If you cannot do so, the government will not allow those costs. This means you as the prime must develop a process to ensure that the subcontractor's final indirect costs meet the test for alowability. This does not mean that you must review the rates, but must have a process for determining them and be able to show their allowability.

Let me ask a fundamental question. You say the potential subcontractor does not have an approved accounting system. Without discussing whether such a system is actually required, the FAR does list elements of responsibility. Having an accounting system that is adequate for the contract type contemplated is an element of responsibility. The prime is generally responsible for determining the responsibility of the sub. How have you determined the potential sub is responsible if you have not determined that it has an adequate accounting system?

After much wailing and gnashing of teeth, they eventually came around to our point of view, although they felt the contractor was getting a windfall.

The government's position in GaN is not an isolated incident. I have had to battle two contracting officer's from two other agencies over the same issue.

Thanks.

H2H, can you be a bit more specific concerning the article you reference. Maybe I am looking in the wrong place, but I could not identify it.

See if the DPAP memo at the following link answers your question. This memo is still in effect. http://www.acq.osd.mil/dpap/policy/policyvault/2008-0171-DPAP.pdf

Does the RFP specify the LOE or are you free to propose what you consider to be an adequate LOE to accomplish what needs to be done?

I guess my question goes to whether the contractor would be liable for damage to the building under the clause you cite, if the damage was caused in whole or in part by the fault or negligence of the government. I'm trying to learn something here.

Joel, I have a question just based on curiosity. Would your advice be different if the government knew the tree posed a hazard to the building and had planned to remove it?

I have now encountered my first exposure to a misapplication of this deviation. A contracting activity has issued an RFP for an R&D contract (R&D contracts are exempt from the required guidance by Sec. 808). The award will be made competitively and is for a new requirement that was not in existence in FY 2010. Some of the effort required will be performed by individuals who are subject to the SCA. The contracting officer has asked all offerors to submit their 2010 labor rates for all employees and 2010 indirect cost rates (most of which probably have not been finalized yet because of the DCAA backlog). This is some indication that the Deviation needs clarification.

H2H, I somewhat agree with what you are saying. If you go back to my original post in this thread, I said not to be surprised if DCAA got involved even if an audit was done by a third party. I did not say that DCAA would get involved. I still stick by that observation. What DCAA would do if they were asked to review the third party's work to see if the contracting officer could rely upon it, would be speculation on my part. However, I have seen DCAA offices look at the conclusions reached by third party auditors then do sample transaction testing to determine if the third party's report could be relied upon. I have also seen DCAA ask for the workpapers to review and then sample the transactions identified in the workpapers. I have also seen them punt as you indicated based on a lack of resources. In other words, it is a crap shoot as to what will happen with DCAA.

Tgun, I am still not clear on whether you are talking about interim vouchers on cost reimbursement contracts for services or completion vouchers on cost reimbursement contracts. If it is the former, your activity may want to reconsider the way you are processing vouchers in light of DFARS 242.803 which states The contract auditor is the authorized representative of the contracting officer for— ( A ) Receiving vouchers from contractors; ( B ) Approving interim vouchers for provisional payment (this includes approving the fee portion of vouchers in accordance with the contract schedule and administrative contracting officer instructions) and sending them to the disbursing office; ( c ) Authorizing direct submission of interim vouchers for provisional payment to the disbursing office for contractors with approved billing systems;

In regard to H2H's point 1, look at the DCAA Contract Audit Manual 7-1002.5(d).

Here is what 52.232-25 has to say about review time. If the invoice does not comply with these requirements, the designated billing office will return it within 7 days after receipt (3 days for meat, meat food products, or fish; 5 days for perishable agricultural commodities, dairy products, edible fats or oils, and food products prepared from edible fats or oils), with the reasons why it is not a proper invoice. The Government will take into account untimely notification when computing any interest penalty owed the Contractor. Based on this, review time is included in the 30 day time period. If the government takes more than 7 days to return a defective invoice, the excess time is deducted from the 30 days when the invoice is resubmitted. In tguns post number 8, the date the interest clock starts to run is 3 June when the COR received its.

Usually such points are non-transferrable. If that is the case, they could not be transferred to the government. Also, many contractors have their employees use their own credit cards for travel then reimburse the employee for the travel expenses. When this happens, it is the employee who earns the points, not the contractor. Thus, the credits cost principle would not apply in that circumstance.