dtonated

Thanks for the response. I think you answered my question but to clarify, Center A & Center B are part of the same Business Unit reporting to the same Home Office and share the same G&A expense pool. I think we have a problem but cannot get others to agree with me

Question: A company has 2 Profit/Loss (PL) Centers (Center A & Center and both centers are within the same CAS 410. Center B produces commercial products as defined in Part 2. Center A is proposing on a govt contract and wants to use products from Center B as part of its offering. The transfer from Center B will be at established pricing, qualifies for an exception under 15.403-1(b), and pricing was previously determined to be fair and reasonable. The decision was made that Center A will subcontract for Center B’s commercial item. Center A will apply profit on Center B since Center B’s price will be Center A’s cost. The question is can you subcontract between the Centers when they are part of the same CAS 410? The FAR doesn’t define ‘division’ or ‘subdivision’ but I’m having a difficult time making the distinction that a P/L Center within the same CAS 410 is either. Is ‘division’ a term that’s up for interpretation?