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Retreadfed

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  1. The CAS do not reqjuire a contractor to invoice for actual costs. They only require a contractor to account for costs in a certain way. Whether a contractor bills for costs that are properly accounted for is a different matter. For example, overrun costs on CAS covered cost reimbursement contracts can be measured, assigned and allocated in accordance with the CAS, but the contractor cannot bill for them until and unless additional funds are added to the contract. Similarly, nothing requires a contractor to bill the government for all costs it has incurred even if it is permitted to do so under the contract.
  2. The only issue I can see is the question of severability of services. The option crosses two fiscal year boundaries. As a general rule, contracts or options for severable services, including R&D contracts, cannot exceed 12 months in duration. If the services are severable, you would have to shorten the period of the option. Because you are buying R&D, it is unlikely that the services are severable. However, you should verify this.
  3. I believe it is a proper interetation of the CAS. However, also see FAR 31.205-52, 31.205-49 and 31.205-11.
  4. Unfortunately, this is not an uncommon belief of some contractors. Unless a cost regulation limits its applicability to direct costs, cost regulations apply to indirect costs as well as direct costs.
  5. The FAR did not require approval of the determination that adequate price competiton existed. FAR 15.403-1©(1) provided three alternative bases upon which an exemption from the submission of certified cost or pricing existed. ©(1)(ii) required such an approval, but if the circumstances listed in (i) or (iii) were present, no such higher level approval was needed. Further, the DPAP memo specifically states that contracting officers will not use the procedures at (ii) or (iii) but will use the procedures outlined in the memo instead. To say that requiring a contractor to disclose certified cost or pricing data when a FAR exemption is applicable does not exceed mere internal guidance and impose a burden on contractors is disingenuous. It will be interesting to see the result if a contracting officer follows the DPAP guidance instead of the FAR and then attempts to get a price adjustment for defective pricing. Although I have not been able to find it, I remember a decision involving a case similar to this where the contracting officer required certified cost or pricing data when it was prohibited by the FAR and later tried to get a price reduction for defective pricing. I believe this was an ASBCA decision and the Board held that the contracting officer's actions were unauthorized. Thus, the government was not entitled to a price reduction.
  6. By its terms, 52.222-41 is to be included in all subcontracts that are subject to the SCA. However, the clause normally should not be included in contracts for construction that are subject to the Davis-Bacon Act. Therefore, subcontracts under construction contracts usually should not contain 52.222-41.
  7. Would anyone like to comment on what, if any, impact 41 U.S.C. 1707, http://www.law.cornell.edu/uscode/text/41/1707 has on the DPAP memo?
  8. Note that the CBCA decision is based upon the fact that each party to the CTA had its own contract with the government. From what we have been told, there is no indication any of the facts in Lockheed Martin are present in Sharpone's case. For the leading case on whether subcontractors can have privity of contract with the government or file a claim directly with the government see http://openjurist.org/713/f2d/1541/united-states-v-johnson-controls-inc. As a final point, see FAR 44.203((3) and the following sentence from 44.203© "The [subcontract] may not attempt to obligate the contracting officer or the appeals board to decide questions that do not arise between the Government and the prime contractor ."
  9. My posts were generally based on the concepts expressed in this sentence from Vern's Post #16: "The government does not have to compensate the prime for subcontract increases unless the prime has compensated or must compensate the sub." Sharpone11 was not very clear as to what situation (s)he is actually facing, but three possible scenarios come to mind. For all three let us assume that the prime and subcontracts are not cost reimbursement contracts. First, the subcontract has no price adjustment clause in it and the prime has not adjusted the subcontract price to reflect increased wages and fringe benefits the sub is required to pay due to a new WD being incorporated into the subcontract. In this case, I do not believe the prime would be entitled to an adjustment because it has incurred no increased costs. Second, the subcontract does include a price adjustment provision similar to the -43 or -44 clause and the prime has adjusted the subcontract price in accordance with that clause. In this case, the prime would be entitled to an adjustment because it has incurred increased costs caused by the new WD. Third, the subcontract does not contain a price adjustment clause, but the prime contractor voluntarily grants the subcontractor a price increase due to the increased wages and fringe benefits the subcontractor is required to pay its SCA covered employees. While others may have a different perspective, I do not believe the prime would be entitled to an adjustment due to this voluntary act because the subcontract price increase was not a contractual obligation of the prime.
  10. Hcuffage, the last paragraph in your post makes the point I was driving toward in my post #2. That is whether a subcontractor is entitled to a price adjustment due to a new WD attached to a prime contract is determined by the terms of the subcontract concerning the subs right to such an adjustment. Sharpone11 said he did not know what the subcontract says in this regard. In this case, I don't think it is appropriate for us to speculate on what the subcontract may or may not say. Simply put, we cannot answer Sharpone11's question without such knowledge. Further, whether subcontractor employees are entitled to be paid the wages and fringe benefits called for by the new WD is a different question from whether the subcontractor is entitled to a price adjustment due to the new WD. Moreover, if the prime contractor is under no obligation to adjust the subcontract price due to a new WD, why would the prime contractor be entitled to include any increased wages and fringe benefits the subcontractor must pay its employees in the prime's price adjustment?
  11. Following on to Vern's last statement, the FAR is promulgated pursuant to the OFPP Act. According to that Act, the FAR is only to apply to procurement contracts as defined in the Act. Because the FAR only applies to procurement contracts, the FAR definition of a contract should not be interpreted as meaning that other agreements that are not procurement contracts are not contracts. In other words, the only thing we can derive regarding grants from the FAR definition of a contract is that a grant is not a proucrement contract. We cannot say that a grant is not a contract.
  12. To add to what Don wrote, think about the definition of "contract" that is generally used to describe a commercial arrangement between private parties. That is it is an agreement between competent parties for a legitimate purpose supported by adequate consideration. This clearly describes a grant.
  13. Hcuffage, 52.222-41 does not provide for a price adjustment. Price adjustments are provided for by 52.222-43 and 52.222-44. Both of these clauses apply to FP, T&M/LH contracts, but neither is a mandatory flow down clause.
  14. Krusem, you say the government believes the IGE is correct. However, that does not neccessarily mean that the way the solicititation was structured reflects the assumptions upn which the IGE was developed. Further, there may have been language in the solicitation that would be interpreted in a way by contractors that is inconsistent with what the government wanted. Have you looked at the solictation and technical proposals from this perspective?
  15. If the LOE is not in the contract, why do you think you have an LOE contract? Also, if the LOE is not in the contract, what "ceiling" are you wanting to increase?
  16. What does the subcontract say about adjusting the subcontract price due to wage increases?
  17. Wayforward, for future reference, the Limitation of Cost clause applies at both the contract level and task order level. See, George G. Sharp, ASBCA Nos. 55385, 55386 (October 3, 2007).
  18. Consupport, you mentioned that a task order would be issued. A quick question, is the contract subject to the Service Contract Act?
  19. I agree with Vern. In addition, I think the reviewer has some concepts confused. The Disputes clause deals with claims. A claim is a different action from filing a request for an equitable adjustment. For example, if you are in DoD, an REA needs to be certified, just as do certian claims under the Disputes clause. However, the language of the two certifications is different and the certification for an REA does not satisfy the requirement for a cefrtification under the Disputes clause. Further, the consequences attached to filing an REA are different form the consequences of filing a claim. For example, an REA does not accrue interest, whereas a claim does accrue interest. Additionally, the cost of pursuing an REA is generally an allowable cost of contract administration, but the costs of filing and pursuing a claim are expressly unallowable costs.
  20. For jwomack, if an ADA violation occurs, what is the consideration running from the government to support a contract?
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