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Neil Roberts

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Everything posted by Neil Roberts

  1. @HigerED004, paying faculty wages during the summer does not strike me as something new even in the world of government contracts/grants. I believe your university should consider bench marking other large research universities for possible solutions. Large research universities seem to maintain an office of contracts and grants to assist proposals and financial execution of grants and contracts.
  2. @HigerEd004, my take is as follows: Costpoint appears to have some kind of programming software of its system for deferred compensation. Have you presented your detailed scenario to them and if so, what was the response? If not, perhaps installation of it resolves the matter. If you already have installed this Costpoint deferred compensation programming, and the accounting system was reviewed and found to be adequate, whatever results it yields as to recorded/incurred costs and employee timekeeping entries/timing should yield acceptable deferred compensation results that comply with 52.216-7 (when it is included in a contract.) Ask them if it does and the extent to which Cost Accounting Standards 48 ECFR 9904.415-50 may be applicable and included in its deferred compensation program.
  3. @HigerEd004, your post now seems ready for a response. There are some members on this site that are experts at contractor accounting systems and allowable cost and payment requirements.
  4. @HigerED004, can you explain with an example, what the problem or issue seems to be? There are several different concepts mentioned in your post. Examples: use of the word "allowable" infers a cost reimbursement arrangement, Grants are different from FAR federal contracts (are your "projects" federal contracts?), total time accounting system for recording hours does not, to me, have a clear relationship with "deferred pay" (and who is being paid on a "deferred" basis, your entity from the Government or a supplier to your entity).
  5. Tzarina, Your company could solicit advice from the CO, but blind following of the advise is not recommended for a prime contractor in my opinion. By way of example, C. Culham indicated that legal help is a subcontract. It may be for the federal government, when it purchases. However, unless the prime contract directs your company to obtain legal services, it is not a subcontract in my opinion, and furthermore, does not belong in supplier management as a procurement. It should be contracted for by another function such as an existing law department of the company, Contracts, the President, or the Board of Directors, etc.
  6. I have found that companies that "automatically" send all "buy" item requisitions to supplier management because supplier management buys, leases, etc, do not properly address the issue you are writing about. Contracts and financial management functions should be involved with understanding and addressing the issue you are grappling with because it involves the contract and impacts the entire company. Are they? The major prime contractor where I worked eventually came to a company level understanding with respect to consultants, interdivisional work and other situations, and embodied this in company and supplier management procedures. Pushback from supplier management and suppliers helped.
  7. I wonder if anything has changed since this 2016 WIFCON discussion https://www.wifcon.com/discussion/index.php?/topic/3573-definition-of-subcontractor/.
  8. To my knowledge, I know of no applicable law or regulation that "contractor with a fixed price government prime contract shall not enter into a cost reimbursement contract with a subcontractor for a commercial item or service.".. If this is the language your people are looking for. FAR 52.244-2 if included in the prime contract, may require consent for the contemplated cost reimbursement contract. There may be other business risks for entering into such an arrangement including but not limited to CPSR perception.
  9. Fara, I am not comfortable leaving the impression and/or advising that a required commercial service effort that is too uncertain to price as fixed price, is a market or catalog price. If there were some facts provided to me that support a contrary conclusion, other than two parties said it is a market or catalog price, then maybe it is a commercial service.
  10. I do not agree with either of you (Don/Fara). I think the words of the definition speak for themselves, whatever that means to you and whatever case law or intellectual discussion reveals. Yes, Fara, I did understand that you wanted to know only whether a commercial service can be a cost type contract. I couldn't divorce myself from examining what a commercial service is in trying to answer the question. I understand it came to you that way but I don't know your role and whether your silence would be understood by others as agreement as to whether it is a commercial service and the extent to which it matters to you, so I veered from your specific request.
  11. I said "does not appear to meet" because of the definition of commercial services as follows: "(2) Services of a type offered and sold competitively in substantial quantities in the commercial marketplace based on established catalog or market prices for specific tasks performed or specific outcomes to be achieved and under standard commercial terms and conditions." I did not see anything in the definition that lead me to think that non competitive commercial services that have no established market or catalog price, and can not even be estimated, are commercial services.
  12. ...If you want to call it a commercial service when it does not appear to meet the pricing requirement for commercial services per 2.101. I think the request made of you to search for a specific "prohibition" generally regarding commercial services and contract type, is too narrow.
  13. Hi Joel: FAR 52.215-12 and -13 is flowed when incorporated into the customer's contract, with an alteration that substitutes company or its representative for Contracting Officer or its representative. FAR 52.215-10 is flowed when incorporated into the customer's contract, with alteration that adds "or Buyer" after "Government", "Contracting Officer" or "United States." In addition, company flows a standard term that it may recover from subcontractor an amount equal to related price reduction of company's contract with the customer and any penalty or interest.
  14. FAR 15.406-2 Certificate states as follows: ***Insert the day, month, and year of signing, which should be as close as practicable to the date when the price negotiations were concluded and the contract price was agreed to.
  15. In the absence of clear direction from your contracts functional management, in my experience, I would ensure that the plan is developed and timely submitted to your contracts function for the total IDIQ dollar amount, indicating in the plan that it assumes being awarded all task orders at this point. See FAR 19.705-1 (b)(1) and (b)(2).
  16. You could look at at one company did to get the gist of it and then do your own research regarding your company's prime contract clauses and solicitation provisions. See for example, https://www.meggitt.com/resources/Meggitt_FAR_DFARS_Supplier_Certifications_August_2022.pdf
  17. How did your company fill out the certificate in 52.225-2 in its proposal to the Government?
  18. The Certificate of Current Cost Pricing Data includes rate agreements with the government.
  19. Can you clarify why this was cited for the poster's prime/sub situation?
  20. Nothing in your facts indicate that you have any grounds to issue a unilateral change to the contract. If you issue a change about the loss of the laptop and payment, it would usually require the sub to agree. If you think they would, propose that solution to your customer and obtain its advise. Did your company furnish the government property to the sub, or??? I would avoid the talk about "legal" and focus on contracts between the parties and what happened contractually, then re-evaluate your question.
  21. is there a FAR government property clause in your contract with the sub?
  22. @Retreadfed, the clause bothers me and seems ambiguous. And, it may also be more complex than it looks at first glance. I would not issue an inter-organizational order between subsidiaries or joint venture entities because my understanding is there are tax consequences to doing so instead of issuing a subcontract (inter-organizational "order" makes it seem like the parties are one entity). On the other hand, an inter-organizational "transfer" (which poster mentions, and also calls it an inter-organizational "order"), can be issued according to FAR 31.205-26 for commercial work transfer at cost. Commercial work may be "exempt" from CAS. But, poster facts excluded any CAS "exceptions." Due to the complexities, it is suggested poster seek an answer from a well versed attorney or accounting and finance expert.
  23. It is assumed that the subcontractor source selection was justified as a non-competitive transaction and it is below the Truth in Negotiations dollar threshold. You may use any or all of the techniques below (source FAR 15.404-1): (ii) Comparison of the proposed prices to historical prices your company paid in the past for the same or similar item. (A) The prior price must be a valid basis for comparison. If there has been a significant time lapse between the last acquisition and the present one, if the terms and conditions of the acquisition are significantly different, or if the reasonableness of the prior price is uncertain, then the prior price may not be a valid basis for comparison. (B) The prior price must be adjusted to account for materially differing terms and conditions, quantities and market and economic factors (i.e., inflation). For similar items, your company must also adjust the prior price to account for material differences between the similar item and the item being procured. (C) Expert technical advice should be obtained when analyzing similar items, or commercial products or commercial services that are “of a type”, or requiring minor modifications for commercial products, to ascertain the magnitude of changes required and to assist in pricing the required changes (iii) Use of parametric estimating methods/application of rough yardsticks (such as dollars per pound or per horsepower, or other units) to highlight significant inconsistencies that warrant additional pricing inquiry. (v) Comparison of proposed prices with independent cost estimates generated by your company and or a 3rd party company you may hire. You may also engage the services of a government contract experienced audit firm that subcontractor is willing to disclose appropriate information to under a written non-disclosure agreement where the audit firm provides you with an appropriate price analysis disclosing top level information acceptable to the subcontractor. You may wish to consider whether this is so insurmountable that your company buys the subcontractor. You may find it necessary to evaluate whether your company can make the item or provide the service in house. The item or service may need to be re-evaluated to determine whether the work can be included in a higher level sub-assembly or service "design" in such a way that the subcontractor would not be required. The posting would have been enhanced if it included information such as dollar value, whether it was a commercial item or service, dollar value of prime, subcontract and prime contract type, etc.
  24. (b)(2) above bothers me. It indicates that a "segment" order shall be treated as a subcontract. I don't understand this because (b)(2) also states that negotiated subcontracts may be exempt. Segment means one of two or more divisions, product departments, plants, or other subdivisions of an organization reporting directly to a home office, usually identified with responsibility for profit and/or producing a product or service. See FAR 2.101. I have never been able to consider Divisional inter-organizational orders to be negotiated because those segments are part of a common company and are not separate companies. So, it is not clear to me why treating it as a subcontract matters, no CAS exemption seems applicable to me under (b)(2) for inter-organizational orders. This seems contrary to what may have been the intent.
  25. In context of the situation, calling the transaction a subcontract would not be appropriate for an inter-organizational segment order/contract because that term generally connotes an arms length transaction with a party capable of being sued if necessary for breach of contract. A prime contractor with segments, like divisions, can not maintain lawsuits by one segment against another segment because both segments are actually the same party. The potential ambiguity with 48 CFR 9903.201-1 I see is whether the segment is to be considered a subcontract for all paragraphs under (b) or only under (b)(2).
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