Jump to content

Mayonayze

Members
  • Posts

    37
  • Joined

  • Last visited

Posts posted by Mayonayze

  1. 2 minutes ago, Don Mansfield said:

    Are the nonfee bearing costs on a separate line item than the fee-bearing costs? The SEAPORT-E orders that I have seen contain both CPFF line items and Cost (no fee) line items.

    This is probably what they mean, then

  2. 52 minutes ago, ji20874 said:

    The thought that materials are 'non-fee bearing' is a bastardization of a T&M principle, and is not a CPFF principle.

    FAR 15.404-4(c)(4)(i)(C) says "the fee shall not exceed 10 percent of the contract’s estimated cost."  Travel and material are included within the contract's estimated cost.

    Thanks for this, too. Our Navy folk are constantly complaining the SEAPORT-E CPFF contracts stipulate no fee on materials. Have not laid eyes on one of their TO's but will keep an eye out the next time I get a chance.

  3. If I want to propose a 7% fixed fee for a CPFF contract where travel and material are 'non-fee bearing' and the ratio of fee bearing and non-fee bearing costs is weighted such that I would need to put 18% fee on the fee bearing cost items to achieve an overall program fee of 7%, is that acceptable given that the FAR limits fee on non R&D CPFF contracts to 10%? Asked another way, does the 10% limit apply only to fee bearing costs, or at the total cost line?

  4. Hope everyone is gearing up for a happy 4th of July! In my research, i am finding that there appear to be multiple approaches to calculating cost wrap rates, so i was hoping to have the WIFCON crew to weigh in. The options as i have seen them:

    (1+Fringe Rate + OH Rate) * (1+G&A Rate) = Wrap Option 1

    1 + Fringe Rate + OH Rate + G&A Rate = Wrap Option 2

    (1+ Fringe Rate)*(1+ OH Rate)*(1+G&A Rate) = Wrap Option 3

    These calculations all obviously yield different cost wraps assuming the component rates are the same. Please provide any experience you have with these options and any explanation into which method applies to what sort of situation.

    TIA!!!

  5. Hypothetical:

    a company is bidding a contract which, if awarded, will triple its direct labor base. The company has forward pricing indirect rates, but those rates do not accurately represent the true indirect cost realized if the program is awarded. Can the company request DCMA to allow them to bid a ‘win-only’ adjusted set of indirect rates to use in calculating cost and price on the program? If so, what is the process? Does it vary based on contract type?

  6. 'At a fundamental level, you can tell segmentation by G&A rates. Each individual segment must have, by definition, its own unique G&A rate.'

    so if there is not a link between a regulatory coding mechanism and CAS disclosure, is it possible that there is a link between specific indirect pools and coding?

  7. What are the unique identifying codes/registrations that a contractor is required to have in order to create a new business segment that will carry it's own CAS disclosure statement? For instance, is a DUNS required to establish a new CAS disclosed segment? Some of the larger contractors have dozens of disclosed CAS segments, how does the government keep track of these dozens of disclosures for the larger contractors? By unique segment operating headquarters address?

  8. 15 hours ago, Boof said:

    Remember that GSA has pioneered awarding IDIQ contracts with no pricing at all for which there will be competition at the task order level.  The GAO overruled the protest against that method.  So it is not so clear cut anymore.   

    How was that section M structured? Did it state that it wasn't going to evaluate price as part of the best value evaluation? This section M clearly states that price is part of the evaluation and has a distinct weighting compared to other evaluation factors. 

  9. I am reviewing a DRFP Q&A where the Government states that their expected means of calculating the TEP in a best value evaluation for a highly complex multiple award IDIQ CLS program will be to simply sum the labor rates in a labor rate table attachment. I have never seen this before, and am wondering what the merits/limitations are of this price evaluation methodology in a best value competition.

     

    For clarification:

     

    LCAT / HOURLY RATE

    PM /120

    PC / 70

    SE / 110

    ME / 90

    JE / 50

    TEP 440

     

    Thoughts?

  10. Good morning, Team! I am trying to locate resources that would be helpful in an initial charting of the Canadian governement (defense particularly) procurement regulation and best practices.

    As with all of my requests here, i am sure that 90% of the response will be "you can't do it alone, hire a specialist" and i always appreciate that feedback. But we are early in the process and rolling on a shoe-string budget, so i hope that helps stave off the 'you're dumb, get a specialist' feedback :)

    Any help would be greatly appreciated! TIA!

  11. Mayonayze,

    You are dabbling in something that is more complex than you realize.

    1. Reference your definition of "project asset" and "capital asset". No. You've got that wrong. First of all, "project assets" aren't assets because they are expensed. "Capital assets" may benefit multiple programs, or not. Because "project assets" are expensed, they have no useful life. They are consumed.

    2. You are confusing direct vs. indirect expense decisions with capital vs. expense decisions.

    3. When and where title passes is a very complex topic in and of itself. The timing turns on contract type, funding, and the payment and property clauses in the contract (among other things).

    4. Yes, CAS treats them differently. Which is why there is an entire Section of the Disclosure Statement devoted to the topic (Part V).

    5. Yes, you price capital assets and their resultant depreciation differently from direct-charged project expenses.

    I wanted to give you a sense of how deep this rabbit hole goes. Unless you work these issues routinely, you will not get them right. You need assistance.

    Hope this helps.

    Thanks! I understand the complexity (as it eludes many of our resident CPA's) and that i probably have been taught a few wrong things about it along the way. Which is why i was looking for a good resource or reference for making better sense of it and educating myself on it. The cash flow implications are of particular interest, so if there is a certain rung of the rabbit hole addressing that area, specifically, i would like to pull my chute there.

    TIA!!!!

  12. Team,

    Where can i find some information detailing the treatment of these two kinds of assets? To be clear, a project asset is something procured for use on a single program whereas a capital asset is something purchased that can benefit multiple programs.

    Is there a difference in the time period of capitalization? Who takes title to the asset and when? Does CAS treat them differently or is it something that varies by each contractor's disclosure?

    Is there a distinct diffference in how to price either of these two classifications of assets?

  13. Sorry for the late reply, Team!

    In my simple example, there are no other costs to consider other than the hammer as a material line-item. G&A for HR,Finance, BD, and similar. M&H for the procure-to-pay resources.

    The general observation is that the hammer (itself) does not benefit from Payroll, Benefits, Capture Support, and other G&A allocation, so its cost is neither absorbed into that base nor is G&A allocated to it in a cost build-up; under the VA construct. However, the labor resources in the M&H procure-to-pay pool do benefit from the G&A allocation and so they are absorbed into the G&A base and hit with the allocation in the cost build-up for the hammer. The hammer does benefit from procure-to-pay in M&H so its cost is absorbed into that base and allocated the rate in the cost build up.

    Conversely, in the TCI example, the base cost of the hammer is absorbed into the G&A allocation and assessed G&A in the calculation of the cost build-up for the hammer. Hammer will receive a paycheck and benefits this week :)

    The ask in my original post was to make sure that these concepts were sound and not in direct offense of CAS guidelines. Sorry for any confusion, or if the example is oversimplified and therefore not demonstrative of the fundamental compliance baselines for each type of disclosure.

  14. Please review the below examples and advise on how to correct:

    Cost-type contract requires purchase of a hammer. Company A has a TCI CAS disclosure. Cost is as follows:

    Cost of Hammer x (1 + M&H) = Subtotal

    Subtotal x (1 + G&A) = Total cost of hammer

    Company B has a similar contract requiring purchase of a hammer but has a Value-Add CAS disclosure. Cost is as follows:

    Cost of Hammer x M&H = M&H base

    Cost of Hammer x (1 + M&H) = subtotal 1

    M&H base x (1 + G&A) = subtotal 2

    Subtotal 1 + Subtotal 2 = Total cost of hammer

  15. Trying to find the section of the FAR that deals with these kinds of contract arrangements. under what circumstances are relief from the NTE labor rate granted? if the basis of pricing provides for a $50k salary based on statistical compensation analysis and salary surveys, but the market for this particular LCAT is highly volatile and by the time a task-order for this labor is released, the mid-point of the compa-ratio range has moved up and we can't find these guys for less than $55k, then are we stuck holding $5k of that salary in unallowable? doesn't seem to be in the true nature of a CPFF contract...

  16. Mayonayze,

    See the contract clause at FAR 52.216-8, Fixed Fee. I suppose it is in your contract. It says your contract should already have terms on how fee payments will be handled.

    Thanks! The clause refers to 'the schedule'. I assume this is negotiated post award, bilaterally? What do you KO types typically prefer for a schedule construct on an LOE type CPFF where the effort may vary materially month to month?

  17. that's my bad! as a program finance guy, i have learned the bad habit of referring to all cost type fee in EAC speak, as the 'pool', or what is the max we can expect earn in real dollars; vice percentage.

    Fee pile. Expected fee dollars. Pile of bones. What have you...

    Thanks for all the answers!!! One more for additional clarification on the billing side (and i know this will vary from contract to contract) but if the monthly billing includes the 5% fee as a percentage of cost, then i would expect to do a true-up at the end of the contract option period to capture the unbilled fee. In the example from my initial post, if i underran cost by $1M and had only invoiced for $450k of fee to date, i would bill for an additional $50k of fee in the final invoice to ensure that i collect the $500k of fee i was entitled to. Or would i be better served adjusting my invoices month to month as the ETC changes to minimize a true-up situation at the end?

    To be clear, i know that having my cash sooner is better, i simply ask from a compliance perspective and what is easier for the KO to cope with.

  18. Why ask him to explain? He simply used the term improperly, that's all. Besides, even if the contract were CPAF and not CPFF, as he said initiatlly, the "fee pool" ordinarily would not be reducible just because he underran the estimated cost.

    Faulty usage of official terms is a plague on our business.

    that's my bad! as a program finance guy, i have learned the bad habit of referring to all cost type fee in EAC speak, as the 'pool', or what is the max we can expect earn in real dollars; vice percentage.

    Fee pile. Expected fee dollars. Pile of bones. What have you...

    Thanks for all the answers!!! One more for additional clarification on the billing side (and i know this will vary from contract to contract) but if the monthly billing includes the 5% fee as a percentage of cost, then i would expect to do a true-up at the end of the contract option period to capture the unbilled fee. In the example from my initial post, if i underran cost by $1M and had only invoiced for $450k of fee to date, i would bill for an additional $50k of fee in the final invoice to ensure that i collect the $500k of fee i was entitled to. Or would i be better served adjusting my invoices month to month as the ETC changes to minimize a true-up situation at the end?

  19. I did a quick search and nothing definitive came back, so if there is a thread where this is addressed, please direct me to it.

    The question is this: if i find ways to reduce cost on a CPFF contract, is my fee pool is diminished by the savings?

    For example:

    I esimtate the cost of work to be $10M. I bid a FF of 5%. My fee pool should be set at $500,000. If my EAC changes to $9M, does my fee pool also shrink to $450,000?

    It had been my understanding that if you incurred cost in excess of your estimate, then your effective fee % erodes because you can never capture more fee than was set aside in your initial fee pool. however, if you were able to deliver the work at a lower cost, you enjoyed a higher effective fee % as you still collect your original fee pool against a lower cost base.

    TIA!

  20. In comparing our independent estimates for work against other agencies procuring similar work we have found it would be helpful to inform this analysis with data on the most current budgets for those other agencies. Something current, accurate, and complete :)

    Cliffs: Best online resource for USG budget data by agency and budget line?

×
×
  • Create New...