Jump to content
The Wifcon Forums and Blogs


  • Content count

  • Joined

  • Last visited

Everything posted by here_2_help

  1. NDAA for FY 2018

    Bob, Thank you for this analysis. You provide a very important service, one that I rely on. H2H
  2. Ethics and Transparency

    If you look closely at my WIFCON avatar, you can read a quote that I thought was powerful enough to warrant reiteration as much as possible: "The culture of any organization is shaped by the worst behavior the leader is willing to tolerate." Option 1: Become an agent for change. This is the hardest road, but the one with the most payoff at the end. It's risky and, if you don't succeed you might regret taking this path--but it's the honorable thing to try. Option 2: Become an agent for the OIG. Gather evidence. Report your co-workers. Remember your higher allegiance is to the country and the taxpayers. There's no payoff here, except the knowledge that you helped to rid the workforce of some bad people. Option 3: Get out. Don't wait for a new job to arrive, just get out now. If you have skills you should find a job fairly quickly--especially if you are willing to relocate. Save yourself because you can't save anybody else. Option 4: Keep your head down and shut up and do your job to the best of your ability, knowing that you are surrounded by people who are incompetent at best and law-breakers at worst. But at least you have a paycheck and benefits. There's no honor here, but you are surviving. Hope this helps.
  3. How ironic. Just 4 years ago I was dealing with DCAA questioning "idle time" charged by engineers to overhead (while awaiting clearances to be issued, among other things). The basis of the questioning of the costs was that the contractor should have put those engineers to work doing something else -- anything else. Sweeping the floors was an example of what DCAA considered to be a better use of the engineers' time. That was in the audit report.
  4. Well, I suppose the customer could challenge a change using any pretext it could come up with, simply because it didn't like the result.
  5. Retreadfed, Assuming the contractor was unaware that it would make the change when it priced the contracts, upon what basis would the government be able to challenge the change in G&A base? What contract clause would give the government that basis?
  6. If I understand the situation correctly, you are a small service provider with several T&M and cost-type contracts. You have one FFP contract. For some reason, the FFP contract incurred a larger-than-expected ODC, which is skewing your G&A rate -- i.e., the actual G&A rate is lower than expected because the G&A base is higher than expected. As a result, revenue is lower than expected on the cost-type contracts as well as the "M" part of the T&M contracts. Do I have that right? Assuming I've got it close to right, then of course you are picking up margin from the lower G&A applied to the "T" part of the T&M contracts as well as to the FFP contract. So although revenue may be lower than expected, profits should actually be higher than expected. That's not necessarily a bad thing. What can you do about it? Well ... 1. Since you are not a CAS-covered contractor, you can change your G&A allocation base anytime you want to. So go ahead and change the G&A allocation base from Total Cost Input (TCI) to single element (labor dollars) and now your G&A rate is allocated more evenly across your contracts. You don't even have to notify the government that you are making such a change, but it might be courteous to let your contracting officer(s) know. 2. Or you can create a special G&A allocation for your single FFP contract, using the procedures discussed at CAS 410-50(j). You don't have to be CAS-covered to create a special allocation, but it will help to follow the CAS rules if you choose to do so. Here's a link to Karen Manos' article on the topic: http://www.gibsondunn.com/publications/Documents/Manos-SpecialAllocationsUnderCostPricingStandards-CostsPricingAccountingReport-9-2011.pdf 3. Or you can acknowledge that projected rates and actual rates are rarely the same thing, no matter how hard we try to make them that way. Take your lumps and learn from them. Finally, you might want to hire a good consultant to help you with these types of matters, as they are sure to crop up again. Hope this helps.
  7. Indirect Ceiling Rate Adjustments

    I'm interested in the quoted bit above. What does "non-billable" mean in this context? What does contract type (FFP) or prime versus subcontract have to do with labor charging? What I'm trying to say is that non-billable direct labor is still direct labor and the indirect rates should not vary based on whether direct labor is billable or not. Contract type should not impact the direct vs. indirect decision; you must treat all contract types the same and charge the same functions as direct labor regardless of contract type.
  8. Indirect Ceiling Rate Adjustments

    You don't address the basis of the rates you submitted, and the basis for the ceiling rates to which you agreed. You don't mention how the agreement was documented. I think those pieces of information would be helpful.
  9. You need to look by function, not by individual. Does the contractor charge its customers the same way, on a consistent basis, for the same function? Does it consistently treat that function as direct labor? Your hypothetical isn't very clear but ... if the subcontract administration was budgeted 100% in the G&A rate and subsequently the contractor wanted to charge some of that function to a couple of customers as a direct charge, then that would violate the FAR requirement I quoted. The only exception would be if the contractor could show that those "special contracts" were incurring those subcontract administration costs in different circumstances from all the others. Even so, I would expect the contractor to show a lower G&A rate as the result of its "special charging."
  10. You miss the point. The hourly rate categories are what they are. How the contractor maps its labor to those categories is what matters. The proof of the mapping is how the contractor calculated its proposed hourly labor rates for those categories. For example, suppose the contract contains four labor rate categories, as follows-- 1. Junior Engineer 2. Mid-Level Engineer 3. Senior Engineer 4. Program Management But the contractor doesn't have those labor categories in its compensation system. Instead, it has software engineers, electrical engineers, mechanical engineers, program managers, program office support (finance, contracts, etc.), and many others. Thus, it has to map its labor categories to the contract-specified labor categories. How it has done that mapping is critical to determining what functional labor costs can be billed under the contract's terms. Okay?
  11. First, make the distinction between costs and billings. Something can be (or should be or oftentimes must be) a direct cost even if it is not billable or reimbursable under the terms of the contract. With respect to costs, direct costs are defined at 2.101 as being "any cost that is identified specifically with a particular final cost objective. Direct costs are not limited to items that are incorporated in the end product as material or labor. Costs identified specifically with a contract are direct costs of that contract. All costs identified specifically with other final cost objectives of the contractor are direct costs of those cost objectives." (Emphasis added.) The part I bolded matters because the FAR definition used to be that a direct cost was one that could be identified. So now it's very clear that the contractor's decision whether or not to make a cost direct is the controlling decision. In other words, a direct cost is one that the contractor has recorded as being a direct cost. Period. Thus, to answer your question: YES. The contractor could very well define such costs as being direct costs. Next you have to ask whether the contractor is complying with FAR Part 31, specifically 31.202(a). ("No final cost objective shall have allocated to it as a direct cost any cost, if other costs incurred for the same purpose in like circumstances have been included in any indirect cost pool to be allocated to that or any other final cost objective. ...") That's really at the heart of your inquiry. Does the contractor charge such costs as direct costs on a consistent basis? If not, then the contractor has violated the requirements of 31.202(a) and the costs are unallowable. If yes, then the contractor is on safe ground. Finally you have to look at the contract terms to see if those direct costs are recoverable through billings. ji2078 pointed out that they very well may not be recoverable on a T&M contract if there is no hourly billing category that covers them. To answer that question, I would suggest asking the contractor where, in its proposal, did it map those direct costs to an hourly billing rate? Ask for backup showing how the proposed hourly billing rate was calculated, if the contractor wasn't required to furnish that information already. If the contractor can't show you that the hours were mapped to one or more hourly billing rates, then that's going to be a problem for the contractor. If the contractor can show you the mapping, then I don't see how you can ethically object to paying for the costs (assuming the hourly billing rates and resulting contract price were found to be fair and reasonable). Hope this helps.
  12. Does this link do it for you? https://books.google.com/books?id=SQmDbKU_1YIC&pg=PA596&lpg=PA596&dq=CAS+Working+Group+papers&source=bl&ots=efZs2xGiSK&sig=XmGyYXkIdVQz44JVcEWEHuf54bk&hl=en&sa=X&ved=0ahUKEwiutai67bzXAhVoxlQKHRtQDPMQ6AEIWzAJ#v=onepage&q=CAS Working Group papers&f=false
  13. Allowable Costs

    The parties negotiated and reached agreement on the price for the FFP CLINs, based on estimated hours. That price may or may not have included full-time employees. Doubtful, because those employees take leave and get sick and are entitled to holidays, so I'm fairly sure the price didn't include any of that. (Or if it did the benefits were allocated to the direct labor rather than being charged as direct benefits.) In any case, the price is the price and it was found to be fair and reasonable. Now some O&A work pops up and, as the contract provides, the amount to be billed is based on actual labor hours plus other stuff. Contractor employees charge time and it gets billed. Perfectly allowable. Or, as was said in another thread recently, the government isn't buying hours. It is buying a service. One service is FFP and the other service is CPFF. We good?
  14. Are Payment Logs Required?

    I wonder if the spreadsheet could be used in the event a contractor asserts it is due Prompt Payment Act interest? Then the spreadsheet could show that the invoice was approved timely ... even though it took additional time at DFAS to process the payment. Just a thought ... This could be a useful tool if it did more than track invoice dates and payment amounts. If it reflected ACRN payment information it could be used to cross-check DFAS payments by ACRN, and then used at close-out as a tool to help reconcile and correct DFAS, MOCAS, and contractor records. But that would be too much work, I bet.
  15. New FAC Contains Wonderful Thanksgiving Surprise

    Weren't the FAR Councils required by Trump's Executive Order to remove two YouTube links before adding a YouTube link?
  16. Invoicing

    I'm with Vern. That's some good advice, right there. I would add that you can invoice up to the current task order price right now and that invoice should be paid promptly.
  17. govtacct02, Remember that DPAP issued a follow-up memo, stating that any assertions of CAS non-compliance had to cite to the CAS regulation and not to the original DPAP memo.
  18. FMF and Commissions

    I have nothing on point to add, except that if the contractor isn't very knowledgeable about commissions and fees associated with international sales --whether or not government-financed or funded--then I would consider that situation to be very very high risk, from a FCPA compliance perspective.
  19. I suspect the question has to do with whether DPAP and other DoD activities can avoid the required regulatory rule-making process by issuing guidance and memoranda that interpret regulations, without actually incorporating those interpretations into the regulations.
  20. DCAA Audit Backlog

    There is, although enforced rather sporadically by the courts. It's called the statute of limitations, as found in the Contract Disputes Act.
  21. Contractor CAS Segmentation

    There is no link between specific indirect pools and government codes. None.
  22. Contractor CAS Segmentation

    CAS segmentation and DUNS/CAGE/SAMS codes are not related. A contractor must disclose its CAS segments in its Disclosure Statement. Each segment has its own Disclosure Statement. (I assume that if a contractor is small enough not to have a Disclosure Statement then it probably doesn't have more than one segment, but I acknowledge that's an assumption.) As I understand things, CAGE codes identify the intersection of legal entities and geographic locations. I might be wrong about that -- and I'd love to see some authoritative guidance regarding when a contractor is required to establish unique CAGE codes for its various geographic locations. But right now, that's my understanding. In contrast, there is no correlation of CAS segment with either legal entity or geographic location. The contractor defines its CAS segment any way it wants to, and in any way it can convince its cognizant Federal agency official that makes sense. At a fundamental level, you can tell segmentation by G&A rates. Each individual segment must have, by definition, its own unique G&A rate. To answer your question about how the government tracks multiple segments, the larger contractors have CACOs -- corporate Administrative Contracting Officers -- that are responsible for coordination across the entire contractor enterprise. Further, the largest of the large have Corporate Audit Networks to further enhance coordination. Hope this helps.
  23. DPAS

    I'm confused. In the scenario described, wouldn't the first action be to file a claim rather than to stop work? If the subcontractor is a small business, wouldn't it have other options available to address a prime who wasn't paying? Stopping deliveries just seems to extreme, if there are other options. Just saying. Obviously Fara knows the details and the other steps may already have been tried.