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  1. Hi All, Thanks for the responses! It seems I left out some important info. The rate letter applies to retroactively to all of 2018, and says all contract payments should be adjusted to reflect the new rates (i.e., more money for the contractor, or a credit submitted to the government). However, can the contractor receive more money if the obligated funds have been exhausted? How does the Limitation of Cost affect this situation? And what if the the contractor has reached the contract ceiling amount, and exhausted all funds? Also, the letter doesn't say anything about affecting contract cost limitations.
  2. Hi all, I'm curious about the following scenario: 1. A contractor has a CPFF contract with a gov't agency; 2. obligated funding for the contract has been exhausted prior to the end of PoP; 3. at the end of the contractor's fiscal year (let's say 2018, December), a provisional rate change has been approved by DCAA, causing the indirect rates for the previous calendar year to increase or decrease. Given that obligated funding has been exhausted, and DCAA has approved higher-that-originally-approved indirect rates, can the contractor still submit revised invoices and be paid by the gov't? If so, where do the funds to pay the revised invoices come from? Alternatively, if the provisional rates are lower, is the contractor required to submit revised invoices for the year and refund the gov't?
  3. Thanks for all of the replies! Sorry for the lack of some details - I'm sort of feeling my way through the dark when it comes to accounting issues. Hopefully this will help clarify: 1. The exact language from the mod is "...hereby releases the Government from any and all liability under this contract for further adjustments attributable to such facts or circumstances giving rise to this modification." I tried to paraphrase that by saying "at no additional cost to the Government", but perhaps that wasn't the best wording. Also, the only purpose of the mod is to add a requirement for CMR. 2. I am concerned about not whether we can charge as indirect or direct labor because I've recently seen Army solicitations that have a requirement to price the costs of CMR separately as a direct charge, or not price it at all. My most recent experience with CMR is over 10 years old, and I recall that it was a cumbersome requirement, especially if the contract was non-DoD and did not use the standard DoD contract numbering format. We are a very small company with little administrative support, so this could be a significant burden, especially if this requirement starts showing up in all of our contracts. 3. Regarding a question from an earlier respondent, this is a bilateral mod, and we have not signed it yet. 4. Re: Vern's point about what the problem is: I'm trying to decide if I should push back on the CO and advise that we cannot accept the mod without providing a revised proposal reflecting an increase in price due to the additional work, or request that the language (see #1 above) should be removed or modified in some way. Or am I making a mountain out of a molehill? In any case, I don't want to accept a requirement and find out that we have to eat the costs out of our pocket. Thanks again to all of you for your advice and comments.
  4. Hi All, I've just received a mod to an existing contract that adds a requirement for Contractor Manpower Reporting to a DOD contract that is being administered by a non-DOD agency. The language in the mod states that the reporting will be done at no additional cost to the Government. However, my recollection of doing this type of reporting is that it can be fairly burdensome. I also recall that it was a direct charge to the contract. My questions are: 1. As this is a CPFF contract, should the costs incurred for doing the reporting be captured as direct labor or indirect labor? 2. If the costs should be captured as indirect labor, would the language prohibiting the reporting from being charged to the Government make it an unallowable cost? Thanks!
  5. Hi All, I've recently began working with Navy and AF contracts, and I've noticed that both agencies have a "Technical Period of Performance" (TPOP) end date, and then an end date (usually 1-3 months additional) for working on the final report. I have been unable to find a clear definition of TPOP. The issue is that, in R&D contracts, sometimes the preparation of the final report requires work to be done that is equivalent to the work being done during the TPOP. In fact, sometimes it is exactly the same (e.g., data analysis). There seems to be a lot of gray area in this respect. My questions are: 1. Is TPOP legally defined somewhere? 2. Could DCAA disallow certain costs based on whether or not the charges occurred during the TPOP, or during the time between the end of the TPOP and the end of the overall contract POP? Thanks in advance for your opinions! And please let me know if I can clarify any of the above information.
  6. H2H - Thanks very much for the insight! It makes sense that the percentage method is ok when applied to quantity. However, we are applying it to the dollar amount, which I think could be an issue. Let me know if you disagree. Regarding your other comments - I will likely be bald by the end of this FY!
  7. Hi All, I work for a small federal contractor (90% of our work is gov't contracts) that does not have a purchasing department. Rather, our engineers do their own purchasing. Needless to say, this is a nightmare for me from a compliance standpoint, and the President of the company (also an engineer) is resistant to change. I've recently discovered that we are issuing POs for direct charge parts and materials where multiple contracts are charged to one PO. However, rather than noting the allocated amount being charged to each contract's project number, we are assigning a percentage value of the cost of each line item that is to be charged. Here's an example: Widget qty 10 unit price $1 total $10 Contract #A 20% Contract #B 35% Contract #C 42.5% IR&D Project 2.5% I've never seen a company do this before. Is this ok, or do we need to show the exact dollar amount allocable to the contract or project to which the items are charged? Thanks in advance for your thoughts!
  8. Thanks to everyone for the info! There is R&D involved, but we are also building and delivering hardware to be used by the university. DODGAR 22.205(a)(1), an assistance instrument (i.e., a subaward) is appropriate when "the principal purpose of the activity to be carried out under the instrument is to stimulate or support a public purpose (i.e., to provide assistance), rather than acquisition (i.e., to acquire goods and services for the direct benefit of the United States Government)". As stated above, we are delivering hardware (which will be the result of some R&D work - at the very least there will be NRE) to the university. So shouldn't the university use a procurement instrument rather than a grant?
  9. Hi All, My company submitted a CPFF proposal (~$3.5M) to a major university as a sub. The solicitation was a DOD BAA which provided that contracts, grants, or other instruments may be awarded. We've been informed that the university was selected for award, and that a grant will be used by DOD rather than a contract. The university claims that, because it is a grant, fee is not allowed, but that we can "absorb" the fee amount originally proposed in other areas. I've done a fair amount of reading and cannot find any reference to a prohibition on fee under a grant. However, I've never dealt with grants before, so perhaps I've missed something somewhere. Does anyone have any information or insight regarding prohibiting fee on grants to awardees and sub-awardees?
  10. Two questions about the above guidance: 1. You seem to imply that we charge the actual usage as a direct cost to the individual contracts. Is this the case? I'm a bit confused because I thought something that benefited more than one final cost objective could not be a direct cost. But my understanding is based solely on a week of reading, not any actual experience. 2. If the answer to #1 is yes, and we can charge direct, then what about usage that benefits the company and not a gov't contract? Would we then have to charge all of the cost to OH, and tie the gov't portions of usage to cost pools tied to the individual contracts and the company portions of usage to IR&D? Thanks again for your help!
  11. Sorry about that... This is a CPFF completion contract; I believe this is an operating lease with a total value of ~$90k. The full amount of the lease was charged direct to one contract (but now needs to be used on two others). If we bought the item I would think it would be depreciated. However, it will be returned at the end of the lease. Thanks for the questions! Let me know if you need any other info.
  12. Hi All, Although I've been using WIFCON as a resource for almost 15 years, this is the first time I've actually asked a question, so thanks in advance for sharing you knowledge with me, and for all of the guidance in the past 15 yrs! I've recently taken a new job at a small R&D contractor, and I'm dealing with an issue that is utterly confounding me, as I've never dealt with leased equipment under a gov't contract. Here's the facts relevant to the situation (all of which took place prior to my employment): 1. Our company is leasing some scientific equipment to be used on an R&D contract for our DOD customer. 2. The company from who we leased the item wanted pre-payment prior to delivery of the equipment. 3. The Government contracts attorney we were using prior to my arrival advised that pre-payments are not allowable, and we would have to get permission from our KO to bill the full amount of the lease to the contract. 4. We requested permission from the ACO, who's response was "I don't have a problem with it". 5. To complicate matters, we now need to use this leased equipment on two other contracts, but it has already been charged and billed to one contract. Here's my questions: 1. I can't find any reference to pre-payment of leased equipment being unallowable. Does anyone have a reference for this? 2. In order to use the leased equipment (already billed to one contract) on another contract, what do I need to do from an accounting standpoint? Also, leases are not GP subject to part 45, but do I need to also request KO permission to use the leased equipment on another contract? Thanks again for your help! --j
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