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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. Sticking this here but if Bob believes it's a better fit elsewhere, feel free to move it. Link to article.
  2. Fraud requires intent, which is a matter for a judge or jury to decide. A practitioner should never use that term. I'm just saying that I agree with Joel's advice. Second, check out Kearfott Guidance, ASBCA No. 55626, June, 2011. Less on point (but interesting) is Information Systems & Networks Corp., US Court of Federal Claims, May, 2020. After you've looked at them, then obtain competent legal advice.
  3. OTAs are terrible and OTAs via consortia are worse than that. I finished dealing with a recent OTA that required the contractor to have an adequate accounting system as a condition of award. The pricing was evaluated via cost analysis (FAR Table 15-2 format was required). DCAA was called in to evaluate the contractor's proposed costs. The awarded contract included multiple FAR clauses, including 52.216-7. It was an OTA in name only, and I'm sure the CO was proud that they could be so innovative.
  4. First point is that I don't know your costs well enough to form an opinion regarding the appropriate G&A allocation base. Second point is that the Ford Aeronutronics decision established that the contractor has an affirmative responsibility to choose the correct G&A allocation base that best represents the activity being managed. Further, if the contract mix is such that a TCI base is distortive, then the TCI base should not be used. What is the correct allocation base for your company? See my first point. Third point is that you can't have two sets of bid rates, one using the single element G&A base and the other using the TCI G&A base. You have to have one bid rate. HOWEVER, the contracts you won will have the current G&A base used to calculate the G&A rate to be applied to those contracts; the bid rate is now irrelevant. Further, since you have changed your G&A base (and resulting rate) from the one used to price those contracts, you may be entitled to an equitable adjustment in contract price (assuming that the DCAA required you to change your base). I could go on and on. Bottom line is that you need to hire some good government accounting folks, or consultants, ASAP to help you with your issue(s). This is a very complex accounting topic involving CAS and FAR and you won't be able to logic your way through it, in my opinion. Hope this helps.
  5. The BLS escalation rate is (unsurprisingly) associated with labor (salary & wages), right? Does the Green Book cover the same thing or does it cover something else? What costs are you applying the escalation factors to--labor only, or labor plus something else? Regardless, it seems to me that whatever escalation factor you get will be the result of whatever you negotiate. As with all negotiations, I would start with the higher value (6.8%) and see what you can obtain. What would your bottom-line break-even price be (regardless of how you get there)? At what point would you decline the option because the price was too low? My two cents.
  6. The CO doesn't get to approve the contractor's cost accounting practices; however, the CO gets to determine what costs will be accepted in the contract price (or reimbursed). The contractor has appeal rights. If the contractor performs multiple contracts, the logic breaks down. A cost that benefits multiple cost objectives is likely to be an indirect cost, not a direct cost. Also, if a particular CO insists that facilities cost must be indirect when the contractor had elected direct allocation treatment, then the contractor should execute 52.230-7 in Section K of its proposal.
  7. There is no problem for a non-CAS-covered contractor to change its accounting practices (well, other than compliance with Truthful Cost or Pricing Data requirements). The former practice was to charge the cost of facilities as an indirect charge; the changed practice is to allocate facility costs to benefiting cost objectives (contracts) based on occupied square footage, assuming that certain employees charge only one contract for the majority of their time. This can be done.
  8. From DCAA Contract Audit Manual (CAM) Chapter 12. (Emphasis added.)
  9. Sounds as if our OP has received the advice they were looking for. So this post is not aimed at Vel; it's aimed at Joel, since he called me out and invited me to correct him. Joel, notice the part I bolded in your post (above). You yourself used the word "generally." That word implies exceptions, doesn't it? The fact of the matter is that I do not know whether the costs in question are direct or indirect costs for the contractor. Only the contractor knows. And I believe the FAR is permissive in this area, only requiring that the contractor must be consistent in application after making its decision regarding how the costs are to be treated. I've been doing this thing I do for nearly 40 years now, and I will assert that, based on my experience, the direct vs. indirect decision is more challenging and more nuanced than anybody outside of accounting would believe. Allowable vs. unallowable is an easier call to make. So, no. I don't know how the costs in question are treated and I don't believe you do either. You can't -- because you are not the contractor.
  10. Wondering about those contracts where the parties agreed to incorporate the vaccine mandate clause (or where the mandate clause was added unilaterally). Can that clause be enforced, given the injunction?
  11. It's hard to see how it would be, absent a contract clause that invoked it. Was that your point?
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