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Everything posted by Mayonayze

  1. 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!!!
  2. 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?
  3. 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?
  4. Mayonayze

    Contractor CAS Segmentation

    '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?
  5. 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?
  6. Mayonayze

    TEP = Sum of Labor Rates

    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.
  7. 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!
  8. 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?
  9. 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!!!!
  10. 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
  11. 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.
  12. *sips tea* very well then. good day to you.
  13. 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...
  14. if not the FAR, then perhaps the WIFCON bag of wisdom can shake forth a nugget of advice or experience?
  15. not yet, i just didn't know if there were provisions set forth in the FAR that outlined the criteria for a waiver.
  16. 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!
  17. Mayonayze

    Cost Plus Fixed Fee - Fee Pool

    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?
  18. Mayonayze

    Cost Plus Fixed Fee - Fee Pool

    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.
  19. Mayonayze

    Cost Plus Fixed Fee - Fee Pool

    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?
  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?
  21. If a small business graduates after initial proposal submission, at what point prior to award or after award does the prime no longer get credit for that small business against thier small business requirements? There is a BAFO coming, would the prime be required to swap that former small business out at that time, or do the reps and certs carry forward into award and then the prime would have to swap that former small business out at option renewal? Is it defective pricing to continue slotting LOE against the former small business during the BAFO knowing that they no longer qualify under the NAICS code that the reps & certs tied them to during the initial submission? Please cite any specific FAR references that informs this situation. TIA!
  22. yes, that our subs no longer fall under the $ threshold for the applicable NAICS code is the issue. But your final sentence seems to indicate we should be fine. I looked through the CFR section you referenced, but i didnt find anything that discreetly informs your conclusion. but i'm dumb and probably just missed it.
  23. We are the prime submission on a proposal for a 5 year IDIQ. We have a number of small business 8a subcontrators as required by the solicitaiton SBA goals. We submitted the initial proposal several months ago. Several of the firms have graduated from 8a since submission and i have no idea what our obligation is to disclose thier new status, if any. the graduations were based on organic growth vice acquisition or merger. let me know if you need more!
  24. that was helpful. the only question remaining is when re-representation needs to occur. that portion of the FAR was not entirely clear about that when a proposal is in evaluation status. my gut says that we ought to resubmit our section K and any pricing changes driven from swapping out graduated small business, but i still would like to see something in the regulation that discreetly requires it. anyone?
  25. A prime has requested rates from a subcontractor. The prime sent a set of target rates as a guideline. The subk knows from its internal comp system and surveys that it can't get low enough to meet the target in one category. The subk also knows that they are not at all likely to try to fill any of those positions so the proposal team queues up two options: reply with a rate quote at the target or no-bid that position. The subk contracts team blocked the first option citing that a TINA violation because internal data did not support the ability to meet and fill at the target rate. The contracts team recommended bidding the position at rates above target in order to line up with compensation data and if the prime came back and negotiated the rates down, then that would be the appropriate way to get to a final BAFO position at the target rates. Huh? What's wrong here?