Robert Tibbitts

Thanks for the response. I appreciate it. Rob

Hi all, I have the following clause in a proposed subcontract: G.6. INDIRECT COST RATES In no event shall the final amount reimbursable for fringe benefits exceed a ceiling of forty percent (40.00%) of direct labor costs for the entire duration of this Subcontract. In no event shall the final amount reimbursable for overhead exceed a ceiling of thirty-two percent (32.00%) of the total of direct labor plus fringe benefits for the entire duration of this Subcontract. In no event shall the final amount reimbursable for general and administrative (“G&A”) expense exceed a ceiling of twenty (20%) percent of the total of direct labor plus fringe benefits plus overhead for entire duration of this Subcontract. Indirect Rate Ceiling / Percent (%) Cost Pool Fringe Benefits 40.00 Direct Labor Overhead 32.00 Direct Labor + Fringe Benefits General and Administrative (G&A) 20.00 Direct Labor + Fringe Benefits + Overhead Subcontractor agrees these rates shall be ceiling rates in effect for the duration of the Subcontract (Base Period plus all Option Periods). Subcontractor acknowledges and agrees that no indirect or G&A burden shall be applied to travel, other direct costs (“ODCs”), or lower-tier subcontract costs. Subcontractor agrees that all indirect cost rates shall be in accordance with FAR 52.216-7, ALLOWABLE COST AND PAYMENT. b.Subcontractor may be requested by the Division of Financial Advisory Services (“DFAS”) of the Office of Acquisition Management and Policy of the NIH, to establish an negotiated indirect rate agreement for this Subcontract, and if so requested, then Subcontractor shall negotiate with DFAS for such agreement. The cognizant Government Contracting Officer shall be: c. If Subcontractor establishes a negotiated indirect rate agreement with DFAS, and if any such negotiated final indirect cost rates exceed the negotiated ceiling rates stated above in Section G.6.a, then the Government and/or Contractor shall only be obligated to pay the negotiated ceiling rates stated above in Section G.6.a. for the duration of the Period of Performance of this Subcontract. In the event that the rates established by DFAS are lower than the negotiated ceiling rates stated in Section G.6.a, then Subcontractor shall submit an adjustment invoice for any overpayment. (emphasis added) d. Any costs over and above the amount resulting from the negotiated ceiling rates stated in Section G.6.a shall not be reimbursed under this Subcontract or by any other Government contract, grant or cooperative agreement. My main concerns are section b and c. The Prime says subsection b and c are mandatory flow-downs from its contract with the government and that it doesn't have any choice in the matter and must flow-down this language. The Prime reassures us that they believe our rates are reasonable and it will do its best to help in any discussions with DFAS. My understanding is that one of the principles behind a subcontract is that the Sub does not interact directly with the Government. By accepting this clause, it seems we are agreeing to adjust our indirect rates at the request of the Government. We would then have to possibly decrease the rates on the subcontract, which seems unreasonable to me. Any advice on how to respond back to the Prime and not have this clause in the contract? Thanks.

Thanks Don. I've sent him an email and I am looking into attending one of his classes. Rob

I am new to government contracting and administer several contracts that my company has contractor acquired property. Our project managers keep track of all contractor acquired property in spreadsheets and then we submit property reports at the end of the government fiscal year. My contracting department is looking to update/install a property management policy and an adequate system to track the property acquired on our government contracts. As mentioned above, at this time, the project managers do all the tracking. I'm looking to be pointed towards discussions/articles/books/experts dealing with implementing and maintain a government property system compliant with FAR 52.245-1 for our current contracts. Any suggestions? Thank you for your time. Best regards, Rob

Thank you for the detailed answer. This helps a lot. Thanks again.

I'm reviewing FAR clauses in a new solicitation and came across FAR 52.222-60 (Executive Order 13673)(OCT 2016). This is the first time I've come across this clause in a solicitation. In my review, I came across an article that stated President Trump revoked this Executive Order in March 2017. The article stated Trump's Order directs the Department of Labor and other executive agencies to "consider promptly rescinding any orders, rules, regulations, guidance, guidelines, or policies implementing or enforcing the revoked Executive Order." Under clause 52.222-60, we would need to change our wage statements (bi-weekly) to break out the hours worked and overtime hours to correspond to the period for which the overtime is calculated and paid (typically, weekly). Has anyone else run across this clause in new solicitations? How are you addressing it? Is it still applicable given Trump's revocation? Any comments would be appreciated. Thank you.

The firm providing services in this case is chartered in Ireland, so that would be okay.

I see. I misunderstood who "vendor" was referring to. Thanks.

As I understand it, FAR 52.245-1(e)(3) states that under a cost reimbursement contract title does not vest in the government until it is "delivered." Here the vehicles won't be delivered to the government until they are done being used in West Africa. If that's the case, my follow up question is who should bear the cost of insuring the vehicles against property damage until they are delivered to the government?

I'm concerned with damaged caused to the vehicle or property in the vehicle. So this would fall under collision and/or comprehensive coverage.

Does it make a difference that this is contractor acquired equipment so while it belongs to the government they don’t take title until we dispose of it at the end of the contract as I understand the process?

I don't have the contract yet. Just working on the possible issues with the project once it gets issues. Right now it doesn't look like any type of "secret" or enhanced security requirements will apply.

I am currently working on a government contract that is cost-plus fixed fee. The work under the contract has necessitated us buy several vehicles in Sierra Leone. The government will own the vehicles at the conclusion of the contract. Do I need to take steps to insure the vehicles prior to the government taking possession or are the vehicles covered under the government's self-insurance program? I have read FAR 52.245 regarding government property but am still hazy regarding when government insurance kicks in and what steps I need to adequately protect the property.

I currently have work under a government contract that we want to have a large International CRO provide services for. Some of the services the CRO will be providing are from workers located in India. How does the Buy American Act apply to services conducted in a foreign country? Thanks.