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CO1559

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  1. If you would like to see a non-prescribed Key Personnel Clause with detailed requirements, take a look at the one you will find at this link: http://www.hanford.gov/page.cfm/PrimeContracts which takes you to the prime contracts page. Then scroll down to CH2M Hill Plateau Remediation Company, LLC (CHPRC);

    Click on "CHPRC Conformed Contract"

    Click on Section H, and then on clause H.15.

    Enjoy.

     

  2. 2 hours ago, Retreadfed said:

    Moreover, the government does not have the right to audit the costs incurred under such a subcontract.  See FAR 52.215-2.

    Thank you Retreadfed. The audit is of the prime contractor's contract administration, not the subcontractor's cost. For Wifcon I just provided a simple summary of what I found in the subcontract file; looks bad to me, and now I know that it doesn't look good to the prime contractor. As Joel mentioned above, put the onus on the prime. 

    19 minutes ago, here_2_help said:

    I think the first Mod is legit but not the second, because the second request was based on actual costs incurred.

    Thanks for the feedback here-to-help; and all others.

     

     

  3.  

    2 hours ago, C Culham said:

    You have not specified if the original contract had one CLIN in a lump sum or multiple CLINS for the different elements of the service.    Just noting but I am not sure it matters with regard to how I see this.

    Also not sure if you are asking as the prime, the sub or the Government, again for me it probably does not matter but for others it might.

    Thank you C. There are no CLINs; I am working on behalf of the Government. The subcontract contains a changes clause. It was not invoked, nor was it documented.

    1 hour ago, joel hoffman said:

    Yes, it may be appropriate to question the value of the price increase.  See  FAR 31.201-3 (a) -- Determining Reasonableness.

    Thank you Joel, I agree.

    1 hour ago, joel hoffman said:

    How do you know it was a "fixed price contract" ?  What kind of "fixed price (sub)contract is it?  In addition to FFP, a fixed price incentive arrangement is a form of fixed price contract.   You said, "The price proposal was a list of estimated costs by type of service." That doesn't appear to be a proposal for a FFP (sub)contract

    Thank you Joel. The contractor's acquisition policies and procedures define contract types. This one is a firm fixed price contract for commercial items. There is no quantity variation clause, there is no documentation of a change order, nor was the clause invoked. I have no problem with the contractor providing a list of services and respective costs, or a single dollar amount; this FFP subcontract was competed.

     

  4. A cost reimbursement prime contractor issues a fixed price services subcontract on the basis of commercial items. The price proposal was a list of estimated costs by type of service. The following changes clause is included in the subcontract: “Changes in the terms and conditions of this contract may be made only by written agreement of the parties.” (FAR 52.212-4 is not included)

     

    Mid way through performance, subcontractor submits a revised price proposal. In response, the prime issued a modification increasing the fixed price IAW the revised proposal. There is no cost analysis and no mention of invoking the changes clause. However, the bilateral modification stated: “authorizes additional $X,XXX to cover costs of additional lodging, per diem and taxes for XX additional participants.”

     

    At end of performance, subcontractor submits a final list of incurred cost. The prime issues a modification increasing the price to align with the final incurred cost. The subcontractor does not have an approved accounting system.

     

    Is it correct to question the value of the aforementioned price increases?

    Is it correct to characterize this situation as converting a fixed price contract to a cost reimbursement type?

    Thank you!

     

  5. An internal auditor reviewing company education benefits (FAR 31.205-44), questioned certain tuition fees as entertainment (31.205-14). 

    The auditor questioned $999 as expressly unallowable under the entertainment cost principle (FAR 31.205-14) as follows: 

    $698 for Service and Activities Fees: The fee funds student activities and programs as allocated by student led committees.

    $201 in student union building fees:  The fee funds social engagement aspects of student life, and are not essential to obtainment of training/education.

    $100 for student orientation fee: Funds cost of a t-shirt, meals and other giveaways.

    I considered these questioned cost to be unfounded, assuming that they are mandatory fees. Therefore I called the University admissions office and verified that the subject fees are mandatory and included in the tuition payment. In addition, the admissions office told me that the "student activities and programs" cover tutoring among other things that are not entertainment.  I recommended to the IA manager that the costs are allowable because if a person is to be admitted to this university then the person must pay these fees which are wrapped up in the tuition charge and she agreed with me and reversed the auditor.

    I decided to post this as FYI and/or sanity check because I have never seen anyone pick apart education cost and sort out what might be deemed as entertainment.

    Thanks

  6. Retread: Thanks for the advice.  Regarding audit, there has not been an incurred cost audit on this business segment for six years and the tuition issue was not raised in the last audit. 

    Vern: Thanks for the blog entries and quote. I see that these doctorates can take quite a bit of time.

    Here to Help: Thanks to you as well.

    All: I will keep this string of advice in order to jog my memory whenever I run into a questionable cost.  You folks are a great help and I appreciate the free consultation!

  7. My question concerns a cost-type contractor that is paying tuition for an employee who is completing his doctorate on a part time basis.

    31.205-44(b) states: "The cost of salaries for attending undergraduate level classes or part-time graduate level classes during working hours is unallowable, except when unusual circumstances do not permit attendance at such classes outside of regular working hours."    

    Since the education in not during work hours, this principle does not make the cost unallowable.

    31.205-44(c) states: "Costs of tuition, fees, training materials and textbooks, subsistence, salary, and any other payments in connection with full-time graduate level education are unallowable for any portion of the program that exceeds two school years or the length of the degree program, whichever is less." 

    Given that this employee has been working on the doctorate for seven years and incurred $100K, I believe that this principle would make a portion of this cost unallowable because the doctorate program has exceeded two years.  

    I am posting this because I'm not the best researcher and I'm not sure if I am right.  Thanks for your help.

  8. Thanks for the responses, I've been out of town and offline. Regarding Joel's question, I totally agree with what Vern said, and he provided more detail than I could.

    There is a formal Agency wide procedure for changes to the PMB of a "capital asset project." Note that this large dollar contract (CPAF, term level of effort, services) includes several capital asset projects. These cap asset projects make up approximately 25% of the contract value. I have never seen scope "swaps" on the cap asset projects in this contract.

    The question I'm trying to understand is this: If the contractor agrees to no change in cost or fee for these scope swaps, even if some of the scope is changed work, is it allowable to swap work in and out of the Contract without going through the formal change order process of certified cost proposal, review, definitization?

    I assume the answer is that a waiver is required from the HCA. Thanks for your time and help.


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