mpproc

Thanks, BZMAN! The kicker on this one is, I actually am not even arguing with DCMA and DCAA the fact that the KO may/should be withholding payment in accordance with 52.216-8 - I'm just telling them that the KO is choosing not to (Government's problem - not mine!), and they are telling me we should be under billing by 15% (so, doing our OWN fee withhold arbitrarily - completely contradictory to the clause language) to compensate for the fact that the KO is not withholding payment. It's truly unbelievable...

Thanks, Vern! You echo my sentiments exactly, and that is almost to a word what I responded back with. For some reason, DCMA is adamant that we should be unilaterally "under billing" in order to compensate for the CO not withholding payment, with which I wholeheartedly disagree. When I brought up the fact that if we were to do so, WE would be determining as the Contractor the justifiable risk percentage withheld on behalf of the Government, which does not seem right. He basically said that since they can't count on the KOs to do it, the responsibility is the Contractor's - not true.

Thanks, all! Vern - the clause in our contract is the 2011 version of the clause. I should have mentioned, there is no schedule of withholding or anything of the like in the contract. Any retainage we do from a billings perspective would be solely determined by us, the contractor, which seems counterintuitive to the purpose of the FAR clause itself (to protect the government's interest). I'd even go a step further and argue that if we were to "under bill", we would be in non-compliance with our approve accounting system and be billing inadequately same as we had "over billed".

All,

I'd like to get your opinion on a disagreement we are having with one of our DCMA folks. We have been performing under a CPFF contract since 1/1/14 which includes the 52.216-8 clause, and our KO has not withheld any payment of fee to date. DCAA recently audited the contract records, and deferred the question to DCMA on whether or not things have been handled appropriately. Our DCMA POC's answer was simply an e-mail stating "15% fee withhold is mandatory. The contractor has overbilled and no more billing is permitted. It is mandatory, that 15% of the fixed fee be withheld until such time as the Contractor's 2014 Incurred cost proposal is deemed adequate." I contacted the DCMA POC and stated that I don't disagree that the KO should withhold payment up to the 15% or $100K as the FAR clause indicates, but I contested the fact that he is claiming that "contractor has over billed and no more billing is permitted", stating that the onus is on the KO to withhold payment rather than for us to withhold billings (as an aside, our KO expressly told us not to do so). Am I crazy here? In the past, we automatically retained 15% on all CPFF jobs we had which contained that clause, and our DCAA auditors dinged us for doing that and our KOs got angry - it's like we can't win! Please let me know what you think.

Thanks for the help!