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Justice1

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Everything posted by Justice1

  1. Not a waste of time at all....The site is a great resource and I appreciate the input.
  2. All – Background: We are a small business with a IDIQ contract with the Department of Defense. The company was awarded a Level of Effort type Task Order with a Base period and two option years – each with different CLINs and sequential periods of performance that basically followed the calendar year (not the fiscal year) using one year money. Due to an accelerated timeline (requested by the government), Option Year 1 funds were exhausted after 10 months (of the 12 month option year)…. We provided notification of 75%, as well as estimates of additional funds needed to continue. The government initially intended to increase our level of effort / level of funding for the option year and we agreed to go at risk while that was “finalized” (I know, I know). However, because the additional funds were FY 2018 money the government then (after 2 weeks at risk) decided that they couldn’t add 18 funds to the “2017” option year (even though the POP extended into FY18 and the tasking related to FY18 activities) and instead decided to exercise Option Year 2 early. Based on the “at-risk” work, we do not expect to need the full level of effort / funding to complete the tasking on the final option year. As a result, the total cost / fee on the Task Order will likely be below the total Task Order funding…. There is no “limitation of CLIN effort / funding clause” which I have seen referenced on other posts but each CLIN had an estimated cost / fee (and as mentioned was funded with one year money). Question 1: What (if anything) do we need to do now related to the cost overrun (with DFAS, PCO, etc.) Question 2: Can a cost overrun on an individual CLIN be recouped if there are available funds on the task order overall when we close out the task (years from now) with DCMA? Next step is to hire a lawyer / expert, but any help you could provide will help me get to the point quickly (and save a few bucks on those hourly rates)!
  3. On the indirect rate issue - Let me give a less rushed answer with additional information. As mentioned above, our provisional rate was based on expectation of more work (and therefore G/A base cost for direct labor) being completed during 2017. When we faced going at risk, we slowed our delivery to essential activity - specifically, most direct partial-fringe (hourly) employees that supported the contract were stopped (less G&A base)....then when the government felt forced to switch tactic to the early option execution, we stopped completed for a period of weeks while that process played out. During that time - no direct partial fringe (less G&A base) and the salaried direct employees either switched projects, took leave (increase to fringe) or conducted admin activities as appropriate (higher G&A pool / lower G&A base). The result is higher indirect rates than anticipated in the provisional - with the full CLIN level of effort already expended (based on belief that the additional funding was being added to the current option). The rate issue is less the direct cost for "voluntarily" performed LOE (which I appreciate all the previous input on) and more that the expectation of that additional (and preferably contractual) LOE had led to provisional rates that had to be adjusted upward when the Government changed course which we did not anticipate (as demonstrated by our going at risk in the first place). I welcome any other thoughts that might be relevant. Based on the feedback, we (with professional support) are going to be pushing the government to modify option period 1 despite the fact that option period 2 is now in place.
  4. Sorry for the delay - We have billed our provisional rates. However, we updated our provisional rates with DCAA (and began using going forward once approved) in July based on the actual to date and new revenue assumptions (moved upward) based on the accelerated schedule. Because this additional revenue was expected with little additional G&A / overhead, it had the affect of pushing down the rates. Now with that revenue gone, as well as overhead / admin costs relates to this pushing us above estimates, the indirect rates are higher.
  5. Appreciate the insight - Last question. The loss of revenue / increased expense has cause our indirect rates to increase above that included in our provisional rates. However, as discussed, we will have invoiced the full CLIN level of effort / funding (nevermind the at risk work)...will we be able to bill this part of the additional / unanticipated cost overrun when we close the contract....and does the funding to cover it have to be available from the same fiscal year? Thanks again for the help (even if the answers not exactly what we had hoped for)
  6. Vern - Thanks for the response. The answer to every one of your questions is YES. Having said that, I agree that we would have an almost impossible time convincing them to fix Option Year 1 now that they have exercised option year 2. So....my thought is that the best chance that we have is to recoup the cost is during the Task close-out process with DCMA. Schedule I of our incurred cost statement is going to show a significant "under-bill" on the Task Order and as the the result of the "modifications" (option year exercise) the total level of effort and funded amount will be sufficient to cover the under-bill. We have yet to close out a task order, so I'm not clear if they look down to the CLIN level or just the overall task order (which is how it shows in our incurred cost worksheets) You are correct about it being a cost reimbursable contract....and in this case the "extra work" was requested by the government.
  7. To Retreadfed's comment, let me provide a little more detail. Over the 4 years audited, DCAA found that we should have billed some costs that we had considered unallowable (thereby increasing our adjusted costs), and they also found other costs unreasonable and disallowed. While the issues were consistent over the audited years, the amounts varied by year and as a result our net costs were up in task orders and down in others. With each task, the ceiling had been fully funded and we billed virtually all of the funded amount. So....with the impact of the rate adjustments, at the Contract Level we now have task orders with unused ceiling/funding (because we will be paying back the government) but also task orders that the government owes us money (but would go beyond the task order ceiling and funded amount). Because the task orders were for the same customer/work, my hope is that the Contract Officer has the discretion to use the unused ceiling / funding from the task orders that we pay back to cover the task orders with cost overruns as the two basically balance out. The case that Here to Help provided (very helpful thank you!) seems to indicate that the contract officer CAN decide to treat each task order as its own contract... I'm just wondering if the contract officer has discretion / flexibility and/or if anyone has seen it settled at the Contract level across multiple task orders. This was our first cost plus IDIQ, so quite a few lessons learned!
  8. Our company had a 5-year IDIQ Cost plus fixed fee contract with the Department of Defense. With the delays in the DCAA audit process we are just now beginning to close out task orders from 2011-2013. There are limitation on cost / limitation on funds clauses at both the task order and contract level, and we informed the government when we were at 75%. However, because of the adjustments made by the DCAA audits, years later we have now found ourselves with an unexpected adjusted cost overrun on one task order and an adjusted task under-spend on another. These task orders were for the same tasking / customer just different POPs. We are concerned about having a cost overrun on a task order, but taken together we have a net under-spend. Can the Contract Officer choose to settle adjusted costs for multiple task orders against each other (i.e. at the contract level)?
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