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joel hoffman

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Everything posted by joel hoffman

  1. joel hoffman

    G&A not allowed on Travel

    Vern, Thanks. It would seem that the procedures in the clause would be consistent with the discussion in the Thesis of including G&A as a markup on direct costs in a reimbursable CLIN for travel costs. Such a CLIN is presumably included in a contract because it isn’t practicable and/or possible to pre-price the cost and/or amount of travel using an FFP approach. Simply allowing reimbursement at a predetermined G&A rate on incurred costs without redetermination/adjustment would seem to be CPPC where the more the direct travel costs are, the higher the amount of G&A is paid... CPPC isn’t limited to Fee or profit as far as I can tell.
  2. joel hoffman

    G&A not allowed on Travel

    So, are you saying that this clause or something similar to it would have to be used in order to allow G&A percentage on direct travel costs for a reimbursable travel CLIN on a FFP or T&M contract? if the Thesis reflects current legal principles concerning avoidance of CPPC contracting, then it would appear to me that an agency should not and cannot allow use of predetermined overhead rates for reimbursement of travel cost line item on an FFP or T&M contract unless they are subject to adjustment. Thus- an answer to the G&A debate herein.
  3. joel hoffman

    G&A not allowed on Travel

    See also the recommendations concerning predetermined overhead rates for cost reimbursable contracts on pages 107 and 108. I DONT know how current the paper is.
  4. joel hoffman

    G&A not allowed on Travel

    Vern, it has come up before in the Forum in the same context of disallowing certain G&A mumltipliees on direct cost under a reimbursable travel CLIN. I don’t have the time to fully research the issue now. I found an AFIT student’s Thesis paper that included discussion on whether allowing a predetermined G&A rate to be added to direct costs on a reimbursable Line item constitutes Cost Plus Percentage of Cost contracting.
  5. joel hoffman

    G&A not allowed on Travel

    Yes, I was surprised, too. I believe that what I read is based upon using pre-determined overhead rates. See the following general info on CPPC, and more specifically, discussion of using pre-determined OH multipliers, starting at page 39. http://www.dtic.mil/dtic/tr/fulltext/u2/a147779.pdf i haven’t read the entire paper yet. However, if everyone is wondering why some agencies decided not to allow simple pre-determined OH rates to be added to direct costs, this AFIT Thesis research report may explain it.
  6. joel hoffman

    G&A not allowed on Travel

    Vern the other thread concerned a modification to a firm fixed price construction contract with a determinable amount of travel by a subcontractor for a specific work item. There should be no legal reason to prohibit either general and administrative overhead costs or profit in such a situation This thread concerns separate travel line item for an indeterminate amount of travel, presumably. The reason that profit is not allowed for this separate line item, in my opinion, is that it could amount to a cost-plus percentage of cost situation, which is prohibited by law. I have seen where, but cannot remember the case, a decision discussed where adding G&A or other indirect costs to actual direct travel costs could also amount to CPPC. That situation might be a reason for reluctance to alllow G&A on indeterminate amount of travel costs. I think that the question concerning whether allowing G&A on reimbursable travel costs amounts to a cost plus percentage of cost situation has been discussed in a previous thread in this forum. However, I do not have time to research the whole forum archive history
  7. joel hoffman

    G&A not allowed on Travel

    Retread, I was merely responding to Matthew’s comment that seemingly assumes that G&A is charged on travel for all government employees. Im not an accountant and don’t necessarily know all accounting terms. However, I taught training classes from 1991 through 2017 for USACE, to USACE, non-USACE, non DoD and non-Government students, where the cost of the courses, including the labor and travel instructor costs, were reimbursed by the students’ organizations. We also charged the various programs and other government organizations for our labor and travel costs, as applicable to programs and projects on which we worked. In fact, as a consulting engineer in private industry before joining the civil service in 1980, my firm charged our clients for fully burdened labor costs plus reimbursement for direct travel costs. So, at least for services, I wouldn’t say that “everyone” charges indirect costs on travel costs.
  8. joel hoffman

    G&A not allowed on Travel

    I believe that the bases for overhead/G&A in my (former) Govt agency is direct labor, not including travel and other direct costs. Believe me, employees in my agency generally were aware of the multipliers used to determine our hourly labor rates.
  9. joel hoffman

    Bonus Credit Card Points

    Yes, it was years ago, before I retired from full time working. I still think the Pentagon, our HQ and our local Brass were using the freebie miles to jaunt around...
  10. joel hoffman

    Bonus Credit Card Points

    For those that are unaware, until the early 2000’s or so, frequent flyer miles and any other points, rebates, free car rental days, etc. by (DoD only?) government employees on official travel were supposed to be the property of the government. I don’t know how they collected those - other than free car rental days. Our organization didn’t track ff miles. i always suspected that DoD would have used them for the Generals, SESers, Colonels and other HQ big shots that flew all the time.
  11. joel hoffman

    Bonus Credit Card Points

    Oops. Agreed! My above post says as “applicable” and I should have clarified that for this situation. I am referring to “previous contracts”.
  12. joel hoffman

    Bonus Credit Card Points

    PART 31—CONTRACT COST PRINCIPLES AND PROCEDURES Subpart 31.2—Contracts With Commercial Organizations 31.201-5 Credits. The applicable portion of any income, rebate, allowance, or other credit relating to any allowable cost and received by or accruing to the contractor shall be credited to the Government either as a cost reduction or by cash refund. See 31.205-6(j)(3) for rules governing refund or credit to the Government associated with pension adjustments and asset reversions.
  13. joel hoffman

    Bonus Credit Card Points

    Yes, irrespective of the title, the original post clearly referred to “several hundred $” in promotional rebates per month, approaching one percent of the charges. And one of the possible scenarios includes cashing in the cash value to put in the bank. Another scenario involves letting the cash value accumulate and cash in for airline miles.
  14. joel hoffman

    Bonus Credit Card Points

    You’ve got it, I believe. Good references.
  15. joel hoffman

    Bonus Credit Card Points

    Agreed in principle. If the negotiator and estimator don’t have knowledge of a fact, then they aren’t acting with intent or (maybe) negligence.
  16. joel hoffman

    Bonus Credit Card Points

    Yes, thanks H2H for clarifying. When negotiating the cost of a FFP contract, when negotiating a FFP modification that is based upon estimated forward pricing or when negotiating based upon on incurred costs , if the contractor has received or knows that it will receive rebates or discounts, the settled price should reflect the lower cost. This is regardless of whether ‘TINA’ is applicable to the negotiated action. Failure to disclose a known fact during negotiations concerning rebates or discounts is dishonest. But the mere fact that the contractor is able to obtain credit card rebates on an FFP contract doesn’t entitle the government to all or a share of it.
  17. joel hoffman

    Bonus Credit Card Points

    As to how to account for it I don’t know. But See 31.201-5 credits for treatment as a cost (credit) to the government. Clause 52.216-7 Allowable Cost and Payment applies to cost reimbursement contracts. For cost based negotiated acquisitions or contract actions, when Part 31 applies, then 31.201-5 would explain how to treat rebates.
  18. joel hoffman

    Are we still on the hook?

    Sorry I confused the 216.80 with the 232.80 clause. 🤠
  19. joel hoffman

    Are we still on the hook?

    If the KO says that he or she does not have the authority to modify the clause, then the answer to your question is no —You do not have a contractual leg to stand on. KO already told you that he or she cannot modify the clause . This is a task order contract . We don’t know whether this is a technical or cost issue, whether it is only an issue on this task order, whether future task orders can provide a means to reimburse you for any extra effort and cost involved, etc. etc. From the information provided, the need seems to stem from a requirement to use electronic invoicing. We don’t know whether your contract requires progress reporting in some other form. If it is a cost reimbursable type of contract, I’d be very surprised if there were no progress reporting requirement similar to what this clause is asking for.
  20. joel hoffman

    Are we still on the hook?

    Is your only problem that you don’t want to provide progress reports? Do you want additional compensation for the cost to submit progress reports?
  21. joel hoffman

    SCA Seniority

    So would that be a non-appropriated fund instrumentality (NAFI) contract?
  22. joel hoffman

    SCA Seniority

    Hey, a kid that I met at Boy’s State, (https://www.legion.org/boysnation/stateabout) was a “Carny” at the Minnesota State Fair the next summer. He was running the “Wild Mouse” roller coaster on the Midway. 🤠
  23. “31.203 (e) The method of allocating indirect costs may require revision when there is a significant change in the nature of the business, the extent of subcontracting, fixed-asset improvement programs, inventories, the volume of sales and production, manufacturing processes, the contractor's products, or other relevant circumstances.” It appears that you would be proposing “provisional” rates based upon projected budgeted labor costs, as opposed to final rates, based upon actual costs. See, for instance, Section I of https://www.dol.gov/oasam/boc/costdeterminationguide/cdg.pdf
  24. I was thinking that, too. If the organization is sure that it will be able to fund the known requirement over two fiscal years, an 18 month or two year requirements contract would seem to fit the need. Edit: But if the “precise quantities” are known, then perhaps a definite quantity contract or just a simple contract with an option for the next fiscal year to complete the total needs might be appropriate.
  25. joel hoffman

    SCA Seniority

    Good question.
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