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Neil Roberts

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Everything posted by Neil Roberts

  1. Hi Retreadfed No, I am not saying that the government specified any amount of prime contract funds to be used only for a particular subcontract. Subcontract funded amount was intended to mean total amount allotted in FAR 52.232-22. My apologies there. I do agree with you that prime contractors should budget their government funding to cover internal work, management reserve and subcontracts. I spent over 30 years in major subcontracts with two of the top 3 prime contractors. The budget amount (total amount allotted) for each cost reimbursement subcontract was included in the subcontract to make it contractually enforceable. Cost reimbursement subcontracts had a total amount allotted line item. It was incrementally changed from time to time as budget increased during the POP. FAR 52.232-22 was included with alterations to ensure that the prime is not obligated to reimburse a subcontractor for costs incurred and fee in excess of the total amount allotted in subcontract. This ensures that at the prime level, government funding is never unexpectedly exceeded due to subcontracts exceeding the internal budget. Perhaps the prime contractor here did not follow this practice. In my opinion, that is a questionable "non-practice." It may call into question the prime's proper financial management of its subcontracts (enforcing and managing the budget) and potentially could be at odds with approved accounting or financial system requirements. I wouldn't be surprised if there was a potential CPSR concern as well.
  2. Cost reimbursement contracts could be funded for the stated estimated cost and fee if any, or funded for less than or more than that amount. Typically, a cost reimbursement contract is funded for less than the negotiated estimated cost and fee during the earlier parts of performance, and funded for more than that amount as the performance ends. Typically I would expect to see a "funded amount" dollar value line in the subcontract contract. Hope this responds to your question.
  3. 1.Yes assuming the subcontract is not a fixed price contract and if cost reimbursement type, the final billed amount does not exceed the subcontract funded amount.
  4. Tjsmith57, Would you like to clarify what your meant by "incremental funding" or do you have enough information to help you?
  5. Just to give you some idea in general, assuming the funding is equal to or lower than the contract price, you would not need a price analysis or source justification or debarment or usual certifications or usual flowdowns because those were included in the initial file documentation for the procurement. The change documentation should include the established authorizing document for the funds, a written request from the subcontractor for the funds and a summary of the work scope and/or period of performance for the added funds.