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About Sap114

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  1. Essentially yes, to both questions. I really just want to know if there is an impetus for this type of policy and I can go from there. Wild speculation is not only welcome but encouraged.
  2. Ok... I am relatively new to my company and am currently updating and revising the company's process documents. I have encountered something that I might as well ask on here because I am somewhat lost and no one at the company can apparently answer. The policy in question relates to a subsidiary's purchasing authority in the instance that it serves as a subcontractor to the parent company. The policy specifically states... "In the situation where subsidiary supports parent company in the execution of a government contract, parent company will be responsible for procurement activities with the exception of the acquisition of raw materials such as sheet metal, rivets and other raw materials used in the manufacturing of sheet metal parts or cable harnesses. With the exception of rivets and other fastening devices, orders for metal or metal products in support of a government contract will include the requirements of DFAR 252.225.7014." My question specifically relates to the part of the section relating to purchasing authority. I believe the genesis of the provision in question is a FAR requirement relating to a parent company's ability to recover costs and fee of subcontractors who are owned or controlled by that company but I could be way off. The subsidiary is a commercial company and I believe the products and services the parent company procures from subsidiary are commercial in nature. As such, I'm not certain the necessity for this requirement. Does anyone see a cost recovery concern here? Appreciate all help.
  3. My company is thinking of switching to standard Net-60 payment terms for most contracts without much knowledge of doing so other than increased cash flow. My question is, are Net-60 payment terms considered the norm in most government contracting sectors? Furthermore, how is this policy viewed within industries by suppliers, prime contractors, FAR Council, etc.. Has their been any legislation or policy guidance regarding longer payment terms?
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