firstteam7479

Hello Vern and thank you for the response and confirming the thought process here. Yes, I agree -- the key to this is negotiating with the prime and aim to work out a reasonable deal. Thank you for your time in looking at this.

Just need a sanity check here by some of you 'grey beards' that have been around for a day or two. I've received a draft FFP subcontract from my Prime for labor -- hours and dollars -- with a seperate cost reimbursement no fee SLIN for ODC and Travel. We are a small business and the issue is that since our cost accounting system has not yet been audited by DCAA for a determination of adequacy -- the Prime wants to levy terms and conditions allowing reimbursement of direct costs only for ODC and Travel but excluding indirect. Recent discussion with DCAA demonstrated that if we incurred the indirect cost (on travel and ODC) but would not bill it -- then we would have to explain to audit why that was so (and a rationale of Prime contract terms and conditions were not sufficient justification) OR move those costs to unallowable. That is not acceptable. While I understand the Prime's intent to comply with FAR 16.301-3, Limitations, as a metric to issuing a cost SLIN -- it does not make sense when we are billing our USG customer indirect on our travel and ODC on our T&M contracts. The Prime -- through their purported language -- is penalizing a SB not because it does not have an adequate system but it is penalizing that SB for not yet being audited by the DCAA. And this request for audit is beyond the control of the SB. Furthermore -- if the prime is that concerned -- they should then request DCMA for field audit support (again contract is FFP and under $10M) to audit our internal procedures and indirect rates. And just for the record -- we have submitted Incurred Cost Proposals for the past 4 years and we have a predominance of T&M, a few FFP -- but obvioulsy no CPFF to this point. What am I missing here? With that applied logic of 'stripping' out the indirect from ODCs on T&M or cost SLINs for FFP vehicles -- it severely impacts the revenue for a small company.

Vern -- thank you and that was my thinking as well. Concerning the moniker -- yes I was. From 74 to 79; B Co, 1/12th Cav and then with G Co. 27th MNT BN. And you are a Cav Trooper yourself correct?

Hello Vern -- thanks for the response. I agree with your comments relative to the two courses of action. On the second part -- where you assumed I meant "decreasing" the value -- no, I meant exactly as I stated initially -- "increasing" the value of the option we are currently in by the amount of funding available for the subsequent term citing FAR 52.217-8 as basis for the change. In other words -- Current Option Value + Available Funding = New Value. My (procedural) issue is using 52.217-8 as the basis for the change. What say you?

Formerfed -- Yes it does contain FAR 52.232-22.

Pleased about the extension etc. And not trying to gain anything else -- other than a clear comprehension on the correct process on the execution of the transaction. As a Contractor -- we have fiduciary responsibility to "help" our PCO if we believe they may be going down the wrong path. Not saying this is the case here, but rather, I am just trying to collect information to determine if the "mechanics" of the transaction are proper. It is a process and it is important to execute it correctly and be compliant with all of the applicable regulations and law. The more we know and understand the process the PCO must execute -- the better we can advise -- but at the end of the day, it is their decision -- that is what that Contracting Officer Warrant hanging on the wall is all about.

I am prime contractor working a cost reimbursement contract ? Research and Development -- that is nearing the end of its option term and preparing to go into a subsequent option term ? if exercised by the USG. This contract was a sole source award ? citing national security exemption from CICA -- and it contains FAR 52.217-9 Option to Extend the Term of the Contract. Upon examination of all the pertinent facts to support exercising the next option, the program office found itself very short of the available funding ? due to end of GFY drills -- to authorize the next option. In this analysis of what courses of action were available to the PCO, I concluded there could be at least two reasonable courses of action that he could execute. One approach would be to reduce the subsequent option price to the amount of funding now allocated to the program for the next term. Another approach could be to just do a sole-source procurement and add on to that same contract (since it would still be within the same general scope). It is understood that either of these options will require preparation of a J&A since GAO considers both of these approaches (per past precedent See: Outdoor Venture Corporation, B-279777, July 17, 1998; Magnavox Elec. Sys., Co., B-231795, 88-2 CPD ? 431; and, Varian Associates, B-208281, 83-1 CPD ? 78) as new procurements that would require compliance with CICA or sole source justification. The PCO, however, is considering extending the term of the current option citing FAR 52.217-9 and increasing the value of the current option by the amount of funding now available for the program. Now ? although this appears to be a derivative of option two above, FAR 52.217-9 is a not a fit. First of all, a J&A has to be staffed by the PCO for a new procurement. Secondly, FAR 52.217-9 is the clause mechanism to extend the term of the contract by the exercise of an option as opposed to just ? extending the contract option. All of that said ? it also understood that given this contract is an R&D type contract ? Part 17 Option rules of engagement are not applicable to R&D. So my questions are ? 1. What is your take on the two possible courses of action presented in the first paragraph? 2. What is your opinion on the use of 52.217-9 as the mechanism to extend the current option and increase value to the option? (Assume that a J&A has to be and will be staffed). Thanks in advance for your input.