gibson

Wow, this has been an unintended journey. Thanks Retreadfed for your comprehensive answer and Vern for your input also. I have to set the record straight regarding my use of this website for information. I usually rely on my own research of 48 CFR and always verify for myself when I get other input. But not unlike shopping for a big ticket item, I like to hear what others think. It usually enlightens in unexpected ways and helps me go in with my eyes wide open. If I had thought on my own to go to the definition of “CAS-Covered” at 9903.301 I would have found the answer I was looking for early on. That’s the piece of info you gave me Vern which was most helpful – but it wasn’t cheap! I checked it out for myself and now able to provide guidance with great confidence (and references) to others. For me, FAR has never been an “easy read” although it’s better than it was as the ASPR. That reference will likely reveal how long it’s been since I took Federal Contracting Basics. Wifcon is a great forum -- I only wish something like it had been available decades ago. Thanks again for your input.

Verne, I appreciate your help but hated the the condescending part. Sharing your vast knowledge of Gov contracting is generous but ridiculing is ill-mannered. But thanks anyway.

Copy. Thanks Verne. This is a real scenario -- the subcontract hasn't yet been signed and we are pursuing getting the clause(s) removed. The answer is likely staring me in the face but CAS obviously baffles me sometimes so thanks in advacne for the hand-holding as I make another attempt at my question; Assumingall the parties (Gov, Prime, Sub) behave rationally and all clauses are properly applied. Under these circumstances; The LB sub would properly identify this subcontract it in its accounting system as a subcontract "not subject to CAS". Agree? I ask the question this way because I'm trying to get a better grasp on how the CAS "allocation of costs" concepts for a LB Gov contractor are applied. In other words - Cost accounting standards apply only to the universe of CAS covered contracts withing an entity's portfolio despite the fact that that portfolio may include a large percentage of US Gov contracts that are exempt due to the scenario above, or commerciality, or other exemptions in 9903.201.1. Agree?

Thanks fellow Wifconers for your replies. We all agree that the prime contractor is exempt from CAS since it is a SB. Consider that the SB decided include in the subcontract to its first tier LB, the clause at 52.230-6 Administration of Cost Account Standards but not the clauses at 52.230-1 or 2. Do you agree with the following? Althought the first tier LB subcontractor [under the prime contract mentioned above] is subject to full CAS coverage for all its CAS covered contracts, the LB would NOT a) be subject to CAS compliance for the subcontract in question B ) would properly designate this subcontract in its own accounting system as "Not CAS Covered" Thanks in advance

If a SB prime contract is exempt from CAS based on the SB exemption at 9903.201-1( B )(3), is the first tier LB sub exempt from CAS if no other exemptions apply and the LB is otherwise a CAS covered entity based on awards greater than $50M in net CAS-covered awards in the preceding cost accounting period?

I started this string and harvested several pearls of wisdom from the exchange. It reveals a vast knowledge of the federal contracts business. Wouldn?t we all agree that opposing positions have even more credibility when egos are not allowed to obscure a vigorous debate on the issues? I may be completely off base because you both go back many years and this is the way you do it. If that?s it, then my comments are only because I haven?t spent enough time on this terrific forum to know that. Otherwise I enjoyed the ride. You guys are great. Shake hands and continue to offer each other differing opinions.

Jacques, Thank you. Your insight is very helpful. Your latest post draws an important distinction between CAS and TINA (i.e. it's not uncommon to hear some of our junior folks get these to concepts intertwined). You point out the idea that one should not be thinking in terms of "action" value when considering the application of CAS but rather the [potential] contract value. But clearly the value of a given contract "action" (mod, delivery order, other) would drive the applicability of TINA and whether a certification is required. Agree?

Retreadfed, Good point but it was just a ficticious IDIQ I made up with the assumption that CAS applied so I could get to the delivery order question. But to your point, if we were to use the minimum value of an IDIQ as you suggested to determine what applies, I could see problems in that many of the minimum values I've seen over the years were simply nominal values (despite the guidance at 16.504(a)(2) which states it should be more than a nominal quantity). Example: more often than not I've seen IDIQ minimum assigned something like $1000 with a ceiling/anticipated value of $100M. Not saying it's right, only that's what I've seen.

Thanks all for jumping in. You're right; Don Acquisition's Blog was an excellent read. I understand even further now why I struggle with this question. For what it's worth I've always viewed the CONTRACT ACTION as the basis for determining whether TINA (and in the absence of tailored definitions for TINA/CAS/Limitation of Funds/etc) or other such requirements apply. If we were to use the overarching value of a contract as the basis to apply TINA for example, one might see the requirement for submission of cost or pricing data for say a $5K delivery order under an IDIQ contract with a ceiling of $100M, or a $5K mod to a stand-alone non-competitive $200M FFP contract. Clearly that would not be practical across federal contracting business. As Don's Blog reveals, the question gets murkier when we try to apply one definition of "contract" to all concepts such as TINA/CAS/Rule of 2 etc. Although I don't have a definitive answer I am much more informed on the topic. NOTE: To the person who asked about whether the value was based on the Min or max value, I was simply establishing that the IDIQ was in fact correctly assigned under CAS coverage. It was more the subsequent delivery order scenarios I was seeking to clarify. Thanks again

If full CAS coverage is correclty applied to an IDIQ contract (i.e. none of the exemptions apply), does the CAS applicability flow down to all subsequently awarded delivery orders under that IDIQ contract? Example: A cost plus incentive fee delivery order for $600K which would qualify for an exemption (under $700K) except in this case the $600K delivery order is just one of many delivery orders totaling over $50 million under the CAS covered IDIQ contract. Thanks in advance for your help on this topic.

This is a more concise re-write of a previous message Does the clause at 5252.216-9540 ISSUANCE OF ORDERS USING STREAMLINED PROCEDURES (copy provided below) negate the requirement for cost or prcing data? The method prescribed in this clause provides that the the Gov submits its independent Gov estimate (IGE) to the contractor in lieu of the contractor submitting a proposal. If the contractor believes he can do it for the amount in the IGE he accepts amount and the Gov awards a non-competitive T.O.s (T.O. may exceed $650K) Althought the streamlined method does not specifically state cost or pricing data is NOT required I'm wondering if this method used by the Gov properly negates the requirement for cost or pricing data. Note that none of the exceptions in FAR 15.403 appear to apply. Could it be that this is a revers role of offer and acceptnace ? (i.e Gov makes offer and the company has the option of accepting that offer versus providing thier own offer)? Still, the requirements of FAR 15.4 linger and I wonder if our company is exposed should DCAA audit these files and look for the TINA cert. Thanks in advance for your thoughts. Gibson COPY OF CLAUSE 5252.216-9540 ISSUANCE OF ORDERS USING STREAMLINED PROCEDURES (1) For each proposed order, the contracting officer will provide the contractor with a statement of work (SOW) and an independent Government cost estimate (IGCE). (2) Within three (3) working days of receipt of the SOW and IGCE, the contractor will respond with a confirmation letter agreeing to perform the SOW within the IGCE. If the requirement remains valid and the contracting officer determines the IGCE to represent a fair and reasonable price, a fully negotiated, priced order will be issued to the contractor. (3) If the contractor does not agree with the SOW and/or IGCE, a proposal will be submitted to the contracting officer within five (5) working days of receipt of the SOW and IGCE, addressing only the specific areas of differences. Once the differences are resolved between the contracting officer and the contractor, and the contracting officer determines that the price is fair and reasonable, a fully negotiated, priced order will be issued to the contractor.

The Gov has included the clause at 5252.216-9540 ISSUANCE OF ORDERS USING STREAMLINED PROCEDURES in our contract (copy provided below). Thie method prescribed in this clause has been used to determine the price of cost-plus-fixed-fee task orders under an IDIQ contract. The Gov awards non-competitive T.O.s that often exceed $650K using this mehod. Our Large Business contracts department has accepted/performed several orders under this method and has not provided any cost or pricing data or TINA certs. Althought the method does not specifically state cost or pricing data is NOT required, that is the approch the contracting officer has taken. I'm wondering if this method used by the Gov properly negates the requirement for cost or pricing data since it does not seem to fit any of the excpetions under FAR 15.403. Could it be that the Gov is making an offer and our company has the option of accepting that offer thereby creating the contract? Still, the requirements of FAR 15.4 linger and I wonder if our company is exposed should DCAA audit these files and look for the TINA cert. Thanks in advance for your thoughts. Gibson COPY OF CLAUSE 5252.216-9540 ISSUANCE OF ORDERS USING STREAMLINED PROCEDURES (1) For each proposed order, the contracting officer will provide the contractor with a statement of work (SOW) and an independent Government cost estimate (IGCE). (2) Within three (3) working days of receipt of the SOW and IGCE, the contractor will respond with a confirmation letter agreeing to perform the SOW within the IGCE. If the requirement remains valid and the contracting officer determines the IGCE to represent a fair and reasonable price, a fully negotiated, priced order will be issued to the contractor. (3) If the contractor does not agree with the SOW and/or IGCE, a proposal will be submitted to the contracting officer within five (5) working days of receipt of the SOW and IGCE, addressing only the specific areas of differences. Once the differences are resolved between the contracting officer and the contractor, and the contracting officer determines that the price is fair and reasonable, a fully negotiated, priced order will be issued to the contractor.