LPCompliance

Thanks for everyone's feedback. I do appreciate all of the discussions. However just to muddy the waters a bit ... I have one contract in question where the costs did not exceed the original contract agreement. For this example, let's just say the contractor was $50K under the contract cost ceiling. After rates were agreed upon, plugging those final rates into the direct costs vs. what rates where used provisionally in billings, the contractor underbilled. However the fiscal year in question happened so long ago that the government has deobligated the $50K in funding remaining because the funds were going to expire and go back to the Treasury dept. So in the scenario, can the contractor invoice for the unbilled portion? My thoughts are that the contractor should have known about the underbilling and when the government tried to mod the contract to deobligate funding they should have taken action then to report it.

Thanks Help. The reason notification of rate adjustments didn't happen is because the contractor delayed submitting an adequate indirect rate cost proposal for years. In some fiscal years an adequate proposal wasn't completed and the contractor and government agreed to a settlement. This made things quite messy because instead of decrementing the final rates based on the 16.2% decrement of costs recommended by DCAA, the government accepted the rates as submitted from the contractor's inadequate proposal and directed the contractor to write a check to the government which I imagine was distributed amongst all the flexibly priced contracts for those years. So now here I am trying to close out their contracts using these final rates.

Hello I'm hoping to gain some understanding in the contract administration process when it comes to submitting a final invoice to the government on cost reimbursible contracts when final indirect cost rates have been settled. In my scenario, I have cost reimbursible (CPFF) contracts that are physically complete. Final indirect cost rate for a particular fiscal year have been settled between the contractor and government. Per FAR 52.216-7(d)(5) the contractor has 120 days to submit a completion invoice to reflect settled amounts/rates. Unless final rates are equal to provisional billing rates, the rates will be adjusted and actual contract cost will more or less than prior to the final indirect rate settlement. If actual contract cost after rate adjustment is less than what the contractor has nvoiced, the contractor has "overbilled". If the actual contract cost after rate adjustment is more than what the contractor has invoiced, the contractor has "underbilled". Schedule I in the incurred cost proposal calls out these amounts. My question is how these overbillings and underbillings are handled in the final invoice in situations where there is no additional funding on the contract. If the contractor overbilled, I expect the government wants the amount paid back to them. If the contractor underbilled, and with no funding, I'm not sure what happens. Also what happens in the same scenario if the final indirect rates are settled for a fiscal year greater than 6 years ago? Thanks.