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About here_2_help

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  • Birthday 12/17/1960

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    No special interests, really. Kind of a jack-of-all-trades/master-of-none kind of person.

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  1. All that may be true, but does your G&A function really spend all that much time managing travel? Remember, G&A expenses are those that benefit the entire business unit as a whole. Certainly, the accounting function may be in G&A but also I would expect to see (without knowing your company) the costs of executive management, B&P expenses, IR&D expenses, and other central payments. Given all that, do you still maintain that managing travel is a significant portion of how G&A functions spend their time? If so, wow. You are essentially describing a travel agency.
  2. That's a good link. I was going to suggest analogs to be found in utility privatization contracts, but the link is more definitive in responding to the question.
  3. First, please ask them to show you the FAR definition of "major subcontractor." Second, tell them "no" and proceed as you normally would. Third, if this is an indication of your future relationship with the prime, terminate any teaming agreement and go find another prime to partner with. There is no FAR or DFARS requirement that compels you to provide the requested details, nor is there any FAR or DFARS requirement that compels the prime to request it or be deemed to be "non-compliant." In fact, the course of action you propose is the traditional way of handling the matter.
  4. This is a great example of the conundrum of subcontracting. On one hand, the prime contractor is responsible for the execution of the contract, without regard to where in the supply chain that execution takes place. In theory, the prime and its supply chain are one team, aligned and working collaboratively. Thus, the prime's PM not only can, but should, be communicating with anybody in the supply chain whose performance is on the critical path. Yet on the other hand, contractually the first tier subK is responsible for the performance of its next tier subcontractors. Thus, if the prime's PM gives direction to the lower-tier suppliers, bypassing the first tier subK PM, then a situation may be created where the first tier subK is contractually relieved of certain performance obligations. There is no right answer to this situation.
  5. Sounds as if you are free and clear to quote your parts to either or both Primes. I'd be interested to learn whether you intend to quote the same price to Prime A as you are quoting to Prime B for Block 2 performance, given that Prime A paid for the development under Block 1.
  6. 1. No. You can't do that. See ji20874's post. 2. No. But there are relevant bid protest decisions. 3. You didn't mention CAGE codes. The are relevant to this discussion. Perhaps more relevant than legal entity.
  7. Yes, that's correct. But I don't have access to any "reserved" procurement regulations so, to answer the question, I made an assumption.
  8. My understanding is that NSA is a component of DOD; therefore, wouldn't NSA just use the DOD weighted guidelines form?
  9. I thought I was done with this thread until I read the post quoted above. 1. Sure, especially if the contractor is a small business. Even if the contractor is not a small business, it can make a change to its cost accounting practices so long as it follows the requirements of the CAS clauses in its contracts. Moreover, if the contractor was really full of vinegar, it could check the solicitation provision 52.230-7 and put the customer on notice that it was treating the requirement not to allocate G&A on travel as a direction to change its cost accounting practices, thus entitling it to an equitable adjustment on its other contracts for the unrecovered G&A expense they would then receive. 2. Yes, of course. The proposal to establish final billing rates (aka "incurred cost submission") must be prepared in a manner that is consistent with disclosed and/or established practices. Also see CAS 401. Further, your comment "they cannot recover the loss" was addressed in my earlier post. Of course they can recover the loss, through negotiating a higher profit rate to compensate them for the lost G&A expense allocation. Moreover, I find it difficult to accept the assertion that "No other element consumes as much administrative and G&A time as Travel." If that's true, the contractor is really doing something wrong. Most travel is ancillary to the work being performed. Further, in my experience most travel is indirect and not direct. So if the contractor is really focusing on managing its travel cost, then I would argue its attention is misfocused. Which brings up another point I should have mentioned in the earlier post. Another option is to STOP CHARGING TRAVEL AS A DIRECT COST. Simply charge all travel to an indirect cost objective. There's nothing at all wrong with this practice and it also solves the problem. Now there is no travel being charged as an ODC and nothing for a customer to object to. Sure OH is increased, but the OH pool is still in the TCI G&A base, so the G&A rate stays exactly the same. If I were a consultant to this contractor, I would convene leadership and ask where the company was going. Is this particular negotiating issue going to become the norm? If the answer were affirmative, then I would be laying out COAs along the lines I've posted on this thread, for their consideration. The time to address these types of issues is before they arise, not after.
  10. Sure, why not? It makes me smile to picture the confused look -- or perhaps panicked look -- on the small business owner's face when they hear they are being awarded an SBIR OTA. "An Oh Tee WHAT?"
  11. Let's be practical about this situation. It doesn't matter whether there is a regulatory basis or not; what matters is that a government customer does not want to include G&A allocated to travel reimbursement dollars in the contract price. How might a practical businessperson with reasonable knowledge of FAR and CAS deal with this situation? Here are some options: 1. Agree to the contract-unique term that makes allocated G&A on travel reimbursement dollars unallowable. In that case, continue to allocate G&A to the contract, but do not bill it. Also do not include that amount of allocated G&A (or profit on that amount of G&A) in the fixed contract price or the estimated cost of the contract. Result: contractor experiences margin erosion. How much? Depends on the amount of travel and the amount of G&A allocated to that cost. This is the price paid for receiving the contract award. 2. Agree as above, but insist on a higher contract profit rate to cover the margin erosion. Result: contract margin is neutral and the contractor is no worse off than it would have been. 3. Agree to disagree on this point and drop to the bottom-line price, if this is an FFP contract. (Reference: FAR 31.102(b).) Negotiate the best deal possible. If this is a non-commercial T&M contract, follow 52.232-7, which invokes Part 31 for the "M" side of the contract. If it is a commercial item T&M contract, follow 52.212-4/Alt 1 (i)(1)(ii)(D)(1) and don't let the CO put "zero" if your customary commercial practice is to allocate G&A to Other Direct Costs, such as travel dollars. If the CO insists, then see #1 and/or #2, above 4. Change the G&A expense allocation base from Total Cost Input to another acceptable allocation base (see CAS 410). Result: G&A is no longer allocated to travel dollars. Consequence: the amount of G&A allocated to all other contract dollars increases and the customer pays roughly the same G&A expense as it would have, had the silly focus on G&A allocated to travel dollars not occurred. If the contractor games it correctly, the customer might even end up paying more G&A! The point is: this situation is manageable. There's no need to treat it like an Ebola epidemic.
  12. CMS, Do you mean you have an ID/IQ contract that contemplates award of FFP task orders, under which you have received (to date) one task order and 16 future task orders already identified?
  13. To amplify on ji20174's post -- SBIR is the Small Business Innovation Research program, in which funding is provided to small businesses (only) through contracts or grants. The awarded contracts or grants are subject to normal FAR (or other) requirements. OTA is Other Transaction Authority, in which the Department of Defense may award a contract to a non-traditional defense contractor for purposes of research, prototyping, or production. Agreements awarded under OTA are not subject to normal FAR (or other) requirements.
  14. Good advice. Are you referring to the "engine competition" case?
  15. Bob, that first link "Defective Pricing" is a wonderful resource! Thanks for providing it.
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