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About Gnatman

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  1. The contract universe in the segment would have to have some contracts with a period of performance that includes 5 years out. That is not probable. Therefore, the offsets don't exist for the Admin of CAS Clause.
  2. Gnatman

    Proposal Costs

    Some here believe this instance cannot be charged indirect because of the wording in FAR 31-205.18 - then that assumption makes CASB interpretation 1 to CAS 402 meaningless. I don't think that to be true. Allocability is the purview of the CASB. Someone should have asked what is this contractor's disclosed practice for charging proposal preparation cost . That is more determinative of what may be consistent.
  3. Most FPRAs written today require both parties to use the FPRA for all Govt pricing actions... Until the FPRA is terminated by either party. DCAA recommended provisional billing or pricing rates do not have any bilateral execution..
  4. Gnatman

    Government Business Reorganization

    The list of areas to be verified is quite long. Seeking the general $ magnitude was a good idea. Financial capability and Corporate guarantee should be evaluated Assets transferred (and pension valuation if a closing has occured) and step up would be a concern Liabilites transferred - legal proceedings, environmental, being dis-associated from causing entity Once the Novation is executed much of the bargaining for special protections/agreements will be lost.
  5. I guess this topic is directed to the Government COs out there who rely on DCAA to perform audits of proposals, and rates to price contract actions. More than not, these contract actions are time dependent, are large dollar, are not competitive or commercial, and cost and pricing data is required. The ground rules & time limitations for the CO have not changed while DCAA has changed significantly. DCAA HQ had issued a guideline in April 2010 for testing the adequacy of all proposals before an actual audit can be started. Add two or more weeks for this effort and expect the number of qualifications and limitations of the audit opinion to increase. Next DCAA issued another guideline in June 2010 pertaining to audit comments when DCAA has not reviewed the rates within an existing FPRA. It is now DCAA policy to not comment of show the resultant cost or positions with respect to unreviewed FPRAs. The negotiator will be cautioned to wait for Audit results of the rates. In our current situation, the CO and his price analyst negotiated the FPRA after 2 months review and DCAA has not provided a rate audit after 6 months. Never mind this timing dynamic, Audits will comply with the guidance and negotiations will be that much harder. I'm sure that the audit agency is on a quest to perfrom audits in accordance with GAGAS, but the potential delay and increased qualifications in audits are traps for each CO and the negotiation process. I have hopes that other COs will comment or list their problems and solutions.
  6. The allowability of costs relating to a lawsuit with a private party that results in settlement was restricted significantly May 19, 2009 when the U.S. Court of Appeals for the Federal Circuit issued its decision in Geren v. Tecom Inc., 566 F.3d 1037 (Fed. Cir. 2009) (Tecom II) (motion for rehearing en banc denied Oct. 2, 2009). Tecom II addressed whether contractor costs associated with defending against, and eventually settling, a private lawsuit are allowable costs under Federal Acquisition Regulation ? 31.201-2. Historically, courts and boards have found these types of costs allowable. In Tecom II, however, the court subjected these costs to a high standard for allowability. I am assisting a CO in determining if a contractor's legal fees are allowable cost for government contracts. The suit in question, to which the legal expenses pertain is between the company we administer and other than a federal, state, foreign govt entity. The usual prohibited expense in the FAR 31.205-47 are for defense and associated costs pertaining to fraud, allegations of fraud, the major fraud act, or false claims. This case brings in new criteria to test beyond the landmark BOEING case, Boeing North America Inc. v. Roche, 298 F.3d 1274 (Fed. Cir. 2002). We should examine the allegations in the complaint or other documents providing notice of the issue and determine whether the plaintiffs allege any cause of action that, if successful, would result in litigation costs being prohibited by the FAR Cost Principles or other cost principles contained in the contract. After Boeing and Tecom II, in addition to causes of action that would result in costs specifically prohibited by the Cost Principles, at least two other causes of action may result in unallowable defense and settlement costs: ? Causes of action that involve conduct ?similar or related? to fraud; and ? Causes of action that might result in a finding that a contractor did not comply with the terms of the contract. The later is the new twist from TECOM.
  7. I think another twist on this issue comes from FAR 52.232-7 ©. If a contractor enters into a subcontract that requires consent under the subcontracts clause without obtaining consent, the government is not required to pay the contractor?s invoices for any costs incurred under the subcontract prior to the date the required consent is received. The government can elect to pay the costs, but reserves the sole discretion to decide to do so. If approval of a request for consent to subcontract has not yet been received from the government, but performance has commenced, contractors need to be aware of the danger of incurring costs for which they cannot yet bill. For this reason, it is advisable for ontractors who will be performing T&M or labor-hour contracts to attempt to get their significant subcontracts approved, in the absence of an approved purchasing system, during the contract formation phase.