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Neil Roberts

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    Providing comments and references for educational purposes. No legal advice is given or intended.

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  1. @CuriousContractor_22, 1. I am not entirely sure whether or what factors/forces are in play (i.e.,taxes, cost accounting standards, etc) with respect to earned profit that may drive a specific result relating to the subsidiary status as an independent company. Someone else would have to answer that. 2. I would expect the parent or subsidiary that holds the task order would issue a purchase contract to the other party. A teaming agreement in my world of government contracts is something that is executed at the proposal stage and specifically states it is in contemplation of a contract between the parties when one of the parties is awarded a contract. This purchase contract should specify all the particulars about the work that the "subcontractor" is required to perform, pricing, terms and conditions, schedule, quality requirements and any other relevant requirements.
  2. @CuriousContractor_22, My argument in response is as follows: Task Order named awardee should request an arms length proposal from the subcontracted party and negotiate the fair and reasonable rate to be paid for its work by Task Order awardee. Any applicable GSA MAS existing rate for the subcontracted party should be considered in coming to such agreement with the understanding subject GSA MAS rate probably has profit in it and the subcontracted entity proposal and the agreed to rate is to be at cost unless otherwise permitted per FAR 31.205-26. A teaming agreement is irrelevant unless it was the task order awarded party.
  3. In my experience, that above is unlikely to fly well with major prime contractors for various reasons including: 1. don't have time to deal with addressing this as there may be schedule impact to the prime for doing so (delay in placing the purchase contract with you due to company required lengthy preparation to negotiate with you over the status of perhaps a hundred or more clauses). 2. "Business" clauses are not prohibited by a prime contract for inclusion in purchase contracts but are not included in the prime contract. Think of it as the business boilerplate often found in non-government contracts. 3. The above position runs the risk of simply going to the next bidder who may have a higher purchase price. Factoring in the time it would take to deal with you in what is seen as a normal business practice by the prime (with dubious results probable), you may no longer be best value. Some exceptions are acceptable provided adequate rationale accompanies it. For your first government contract review, it seems to me your company should engage an experienced subcontract person to review it alongside you. If you wish to proceed with the above suggested approach, please be sure you have your top management's approval so that they are not surprised (and you are not embarrassed or at risk) by any phone call from a prime contract executive or program manager regarding the above suggested approach and your company's viability as a supplier.
  4. I would ensure the disclosure was in writing and states that the most current data is that there now revised rates agreed to by DCAA and Contractor. Most medium to large size contractors that I have worked for or dealt with over the years have a written procedure (which may be required for an approved procurement system) and/or practices to do a final sweep of current cost or pricing data and whether you want to call it courtesy or required, will provide a revised proposal even if only limited in elements or even just the bottom line delta dollars and more, if asked to do so. This can also provide a company with more confidence against any later allegation of defective pricing. Some such contractors even go the length of including a laundry list of the data items disclosed and a reference to the document description and date that did so, and reference the laundry list in the Certificate that is signed.
  5. @Needforspeed, since this has always worked, keep doing it is one option. I would disclose that a new provisional rate agreement is in work and if the award is made before that takes place, I would sign the current cost or pricing certificate without any related changes to the proposal.
  6. If the provisional billing rates are valid only for the current FY(subject to adjustment at year end), how does this work for proposed work that extends into another FY or two? Even if the work is to be performed only during the current FY, how would this work if the proposed increased your base enormously? Would you not think there should be some adjusted rates in the proposal response if current cost or pricing data applied? Maybe you could clarify the details of the Provisional Billing Rate Agreement.
  7. @Salus, ownership information of a JV may be available quickly through products of one or more companies such as Dun & Bradstreet (from the prime contract side, I can tell you we used such reports extensively in evaluating suppliers). If you have not already done so, I suggest you review SBA final rule dated April 27, 2023. It is 54 pages including clarifying JV certification requirements, JV limitations and many other changes. Proposed JV changes to FAR are in process. See https://www.federalregister.gov/documents/2023/04/27/2023-07855/ownership-and-control-and-contractual-assistance-requirements-for-the-8a-business-development
  8. @Salus, Perhaps I do not understand the situation you are describing. I don't know why an awardee under multiple awards can not submit a protest within 5 days asking for formal determination of the small business status of another awardee based on "information and belief." You seem to have relevant information about the status. But, as a practical matter, if the determination is made that the other awardee was not qualified for the status, the Agency would just award to the next qualified status bidder in line. So, why would you protest no matter what information you have, and what SBA process is there to fix???
  9. @LOLM, does this discussion shed any led on your question?
  10. Other questions include, (a)what government department or agency, if any, issued the contract and/or RFP ITQ?(b) did someone apply for government approval of these costs if this is a government contract? (c) is this a commercial contract between two companies with no government involvement? (d) what is PWS? (e) is this a fixed price contract type, flexible contract type, or?? (f) did the RFP or quote state anything about this (g) is this transaction competitive? (h) what is the estimated dollar value of the questioned cost compared to the task order amount?
  11. this DCAA Audit may shed some light on the general conceptual view of contractor hardship post and R&R costs https://www.dcaa.mil/Portals/88/Documents/Guidance/MRDs/m04ppd023.pdf?ver=2019-03-06-135454-660
  12. Agreed. Specifically we don't know if the subcontractors' proposed/disclosed an hourly rate and indirect costs or an hourly selling price only. We don't know the details surrounding the prime contractor's justification/review of the subcontractors' proposed and we don't know if the government poster bench marked either or both. My take on FAR Part 31 is that it is associated with cost analysis. I don't agree the government needs to do a cost analysis of hourly rates, but I agree with what I think is your bottom line, that whatever the government comes up with should be defensible as reasonable.
  13. @FLContracts, Additionally, from the prime contractor you should request a copy of the memorandum supporting the subcontractor proposed rates and a copy of the SOW and RFP/ITQ sent by the prime to each subcontractor. Should you wind up not finding the proposed rates supported enough, you may wish to consider proposing adding special surveillance contract requirements to the prime contract for each of the subcontracts that have questionable rates . The surveillance should include but may not be limited to advance notification and prior consent for each such subcontract/change.
  14. Thanks, Don. You beat me to the punch. @Retreadfed, still unclear to me what you are trying to tell the poster. Are you saying that the poster gathered comparable labor rates are not valid with respect to a prime contractor's subcontracted labor rates unless: "Factors that may be relevant include, but are not limited to, conformity with compensation practices of other firms- (i) Of the same size; (ii) In the same industry; (iii) In the same geographic area; and (iv) Engaged in similar non-Government work under comparable circumstances."??? In any event, the issue is the prime contractor's review, evaluation and substantiation of its subcontractor proposed rates.
  15. @Retreadfed, could you elaborate about the point in your post reference to FAR 31.205-6(b), which concerns personal services? The FAR definition of personal services is: "Personal services contract means a contract that, by its express terms or as administered, makes the contractor personnel appear to be, in effect, Government employees (see 37.104)."
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