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Everything posted by NenaLenz

  1. While conducting an audit of labor charges to a federal cost-reimbursement research contract, contractor discovered that one invoice contained time that was not properly reviewed and approved by the principal investigator. The company has detailed policies and procedures related to labor charging and all the steps were followed with the sole exception of getting contemporaneous sign-off by the PI before submission of the invoice for reimbursement. The unapproved time for for one researcher, two weeks, roughly 24 hours. Company is a subcontractor to higher-ed institution that has a DARPA contract. Company wants to know whether they should report the error to the prime and/or DARPA. They also want to know whether they should deduct the same value of that time from their next invoice. This seems like a small error, but this company wants to get it absolutely right. What should they do? Thank you!
  2. Agency forgot to include a wage determination in a concessions contract until several years into contract. Agency finally added the WD at DOL request. DOL seeking back wages from contractor. Contractor intends to seek equitable adjustment from Agency. We cannot find precedent for how an equitable adjustment would work in a concessions contract. Contractor earns a modest management fee as FFP % of sales and remits a similar size fee to Agency. Any ideas? Let me know if you need additional facts. And thanks for any insight you all may have for us!
  3. I'm on the contractor side of this issue. . . . so I assume this is not good news for us? I didn't think an agency could delegate its obligation to provide the correct WD to a contractor. Can a CO really ask the contractor to locate their own WD? I should have mentioned at the outset that at the time of contracting, the places of performance were not known. And the CO included the following clause on the award cover sheet - "supplier is responsible for obtaining the correct Wage Determination(s) from the website www.dol.gov and paying the wages prescribed as if that Wage Determination was attached to this solicitation/contract." Yes, the SCA clauses were in the contract at the time of award. They were not added with the WD.
  4. Contract is with USPS, which does not use FAR. Contract does include USPS's version of the SCA clauses, including 9-10: Service Contract Act, 9-11: Service Contract Act: Short Form, and 9-12: FLSA and SCA - Price Adjustment Clause. Contract also includes, B-10: Pricing of Adjustments, which basically says - to price adjustments, follow the instructions in Conduct Price/Cost Analysis instructions of the USPS Supply manual. That section explains how the CO should think about pricing an adjustment, but I'm not sure how to apply those principles to pricing an adjustment to a concessions contract. Note that section 9-12(c) provides that: When, as a result of the determination of minimum prevailing wages and fringe benefits applicable (1) every two years after original award date, (2) at the beginning of any option or renewal period, or (3) in the case of a significant change in labor requirements, an increased or decreased wage determination is applied to this contract, or when as a result of any amendment to the Fair Labor Standards Act enacted after award that affects minimum wage, and whenever such a determination becomes applicable to this contract under law, the supplier increases or decreases wages or fringe benefits of employees working on the contract to comply, the supplier and the contracting officer will negotiate whether and to what extent either party will absorb the costs of the wage change. Any resulting change in contract price is limited to increases or decreases in wages or fringe benefits, and the concomitant increases or decreases in Social Security, unemployment taxes, and workers’ compensation insurance, but may not otherwise include any amount for general and administrative costs, overhead, or profit. [I read this to apply only to the three WD-driven contract modifications listed at the beginning of the clause, and not the situation here--meaning that this contractor should have the opportunity to negotiate for profit....] Also, USPS Supply Principles and Practices Manual offer the following guidance on SCA (discussed as one of several mandatory federal laws): 7- Price Negotiations Price adjustment negotiations should be handled on a case-by-case basis. In such negotiations, the contracting officer should consider whether the supplier has attained new efficiencies allowing it to absorb additional wage costs, whether it is possible to decrease hours or consolidate scheduling, changed market conditions, the complexity of the type of service being purchased, and other factors affecting the supplier’s ability to absorb all or any portion of the adjustment costs. 7- If circumstances require that a contract be awarded before a wage determination is obtained, the contract must include Clause 9-10: Service Contract Act and provide for equitable adjustment of the contract terms when the wage determination is incorporated, effective from the date of issuance unless another effective date is specified in the determination. The e98, if not already submitted, must be submitted promptly and explain the need for immediate award. 7- The DOL Wage and Hour Division may require that a wage determination be applied to a contract retroactively, if the contract is subject to the Act and more than five service employees are involved in performing the work. . . . the contracting officer must incorporate the applicable wage determination and attempt to negotiate an equitable price adjustment.
  5. I searched prior threads and couldn't find guidance quite on point. Question: What is the proper way for a GSA Schedule-holder to delegate work to affiliated companies? Intercompany work authorizations? Subcontracts? Facts: The companies are wholly owned subsidiaries of a common parent. One affiliate holds the GSA Schedule contract. The SINs are all for services. Contract-holder gets the contracts/POs/BPAs. Work is performed by affiliates. Contract-holder delegates work to affiliates through work authorizations. Contract-holder submits requests for payment to purchasing agencies. GSA contract lists affiliates as "participating dealers". Contract-holder does not have "subcontracts" with affiliates. I've searched the regs and guidance and I'm not finding a clear answer. Am I missing something.
  6. I think it is a bit odd, too. The SINs are for services. If there are goods/supplies, they are ancillary to the services. The sister companies are listed on the GSA schedule as "participating dealers", with the idea that the company would "self-perform" work by using the labor of its affiliates/sisters. I'm trying to untangle all of this and figure out how it should be set up.
  7. No. The parent company and all the subs/sisters are large. So: the FAR regs are silent as to whether transactions between separate but affiliated companies are subcontracts. But the SBA regs are not silent -- they consider those transactions to be subcontracts. Accordingly, while subcontracts with mandatory flowdowns are not required, consideration of small business subcontracting goals is required? The sister company can't delegate 100% of the work to its affiliates/sisters without violating its small business subcontracting plan, which require good faith efforts toward S/DBE subcontracting goals? Your conclusion makes sense from a strict reading of the definitions. But it is not good news for us.
  8. It sounds like there is no clear answer in the regulations on how to structure/document the assignment of work between the sister companies. The contract itself does not say, either. Follow-up question: The contract-holder is a large business with a small business subcontracting plan. Relying on the regulations, can we take the position that they are not subcontracting when they delegate work to the sister companies, meaning they are not required to use good faith efforts to award that work to S/DBEs?
  9. You're right, the concept of affiliates is broader than what I described. Here, they are "affiliates" because they share the same parent company (they are "sister companies"). They are each wholly owned subsidiaries of the common parent. They are different companies with different DUNS etc. One company holds the GSA contract. Other companies do the work. How should they facilitate that? Subcontracts? Inter-company work authorizations? Does that clarify my question?
  10. I am wondering if the current practice is acceptable.