here_2_help

jrt132, Here is 2(d) in its entirety-- "Paid sick leave accrued under this order shall carry over from 1 year to the next and shall be reinstated for employees rehired by a covered contractor within 12 months after a job separation." I interpret that to mean that sick leave accumulates and crosses fiscal years. However, I do NOT interpret that to mean that the accumulated sick leave is portable. The language uses the terms "reinstated" and "rehired" which strongly implies the employees are coming back to the same contractor they left. I alluded to this circumstance in my original post. The only right to the accumulated sick leave upon termination/separation is that the accumulated balance is reinstated upon a rehire action within 12 months from the original separation date. Otherwise, the accumulated sick leave is lost at termination/separation. I think I got the accounting treatment right in my original post. To your question "is there a difference between PTO and sick leave" the answer is "it depends on the policies of the contractor". Many contractors combine sick leave and vacation (annual leave) into a single PTO benefit, which is fine ... but now that approach carries a bit more risk. I'm guessing many contractors affected by this E.O. will be looking at that decision, and may decide to split the benefits into the individual components. We'll have to see. H2H

Interesting. The accumulated sick leave carries over from one year to the next, but there is nothing in the E.O. that creates a non-forfeitable right to the accumulated sick leave. (Did I miss something?) If there is no right then the sick leave is lost upon termination (but must be reinstated in certain circumstances). If there is no non-forfeitable right then the cost of the sick leave is recognized when it is used, not when it is earned. If the employee doesn't use the sick leave, there is no cost to be recognized for government accounting purposes. What may be "costly" is the need to develop a tracking mechanism for the sick leave. That said, I'm guessing that the contractors most likely to be affected are the smaller ones, the ones who don't publish quarterly financial statements to the SEC. If I'm right, then the tracking mechanism can be as simple as an Excel spreadsheet. Or even 3x5 cards. Whatever works. As for Vern's question, "What's a subcontractor?" the answer is simple. For purposes of complying with the E.O., a subcontractor is an entity to which the prime contract requirement is flowed-down. :-) Hope this helps.

chuparosa, The full incentive fee would be determined at contract completion, yes? The contract is physically complete, right? The contract mod that establishes the incentive fee is typically the final contract mod before closure, yes? If so, I'm unclear why the CO would fee the need to protect the government's interest by withholding a percentage of the incentive fee. Perhaps others can explain the thinking better than I can. H2H

From Original Post --"The requirement is combination of Firm Fixed Price and Labor Hour. In discussions with one of the other Contracting Officers here, he mentioned to me that I would be required to get subcontractor proposals in order to determine the reasonableness of the Prime Vendor's rates (i.e. determining the prime's profit, etc.)." From Vern's Post #7 --"If the other contracting officer is making competitive buys of commercial items (services), why is he worried about the profit that the contractor is making? He should worry about the rates that he is paying." From Desparado's Post #8 --"With the GSA Schedules program, the prime/sub is very different from standard contracting. In short, there technically are no 'subs' in the traditional sense. The rates are already in the GSA Schedule holders contract and have been determined fair and reasonable and are the only rates that a Schedule contractor can charge." To sum up, the rates up to (but not in excess of) the GSA Schedule rates have already been determined to be fair and reasonable, and there is no requirement to perform cost analysis on offers/bids that use those GSA Schedule rates, so it would be wasteful to request contractors to provide subcontractor proposals in order to evaluate any profit that the contractors may be making. Did I correctly synthesize the answer? If not, please let me know. (As if I could stop you.) If I'm correct, then the question has been answered. H2H

EY is not the only accounting firm to perform outsourced audits. Off the top of my head, Capital Edge and Baker Tilley spring to mind. Perhaps also the Berkeley Research Group. Did you try a search on LinkedIn, or Google? Hope this helps.

Are you government or private industry?

Speaking of passivity versus active management, once I happened across a situation on an SCA-covered contract where, when the Dept. of Labor issued new wage determinations, the COR directed the contractor to demote the affected contractor employees so as to not increase the contract price. The contractor complied with the COR direction. Many attorneys, accountants, and other governmental personnel were required to remedy the situation. There were other aspects of the situation, other tomfoolery unrelated to SCA compliance, but helping to untangle that hot mess was one of the highlights of my professional career. H2H

ji -- I'm not sure your analogy holds up, because in this case I would have both ordered the box from a vendor with whom I had a contract, and signed for it upon delivery, indicating I accepted what was being provided. The problem here was that I didn't have authority to order the box, even though I (apparently) had authority to accept delivery. All that said, I agree that it was settled long ago that the authority to acquire is what matters, and sellers have a duty to understand the authority of those doing the ordering and accepting. Also, wouldn't the contract price be INCREASED to reflect an additional quantity of lumber (in excess of that contracted for) was provided and accepted? H2H

In my experience, govtacct02 knows the difference between a DCAA audit of a cost proposal and a DCMA analysis of a proposal. May I suggest we assume it's the former and not the latter in formulating responses to the question? Hope this helps

ji -- In ladybug's post #8, it was stated that the military officer specified the point of delivery and "accepted the excess quantity." Given the issue description(s) in the various posts, I'm not willing to grant that "acceptance" as used by ladybug means "acceptance" in the contractual sense. But what if ladybug used the correct term? What then? H2H

ladybug108 In your post #4 you wrote "No one authorized the contractor to accept any excess quantity" but you also wrote that the customer requrested the delivery. I assume the customer did not specifiy the quantity to be delivered because, as you wrote, "the assumption was made that the quantity was in the contract." Are you now saying that the quantity of lumber to be delivered was NOT in the contract? If the quantity was not specified, how did you arrive at a contract price in the first place? *Shakes head* H2H

Sure. If you have a DoD or DOE contract, and you are other than a small business (as you stated you were), then any cost reimbursement contract of sufficient size will likely contain the contract clause 252.242.7006. That clause establishes 18 criteria that define an "adequate" accounting system. Criteria Nos. 9 and 10 require: (9) A timekeeping system that identifies employees’ labor by intermediate or final cost objectives; (10) A labor distribution system that charges direct and indirect labor to the appropriate cost objectives; DCAA's audit opinion as to whether a contractor complies with any (or all) of the 18 criteria is highly subjective and may often turn on the judgment of the individual auditor who is looking at your policies, procedures and practices. In my experience, certain auditors may assert that a failure to complete timesheets daily (or at all) is a noncompliance with one or both of the criteria listed above. On the other hand, your company may get a pass. You cannot predict what the auditor(s) will say. If DCAA asserts you have policies, procedures or practices that are noncompliant with any of the 18 criteria, then they will tell your ACO that you have a "significant deficiency" in your accounting system. If the ACO agrees with DCAA (and in my experience that's the most likely course of action) then you have an inadequate accounting system and the customer may impose payment witholds up to 5% on any of your CAS-covered contracts. More importantly, it's going to be tough for you to win any future cost-reimbursement work without an adequate accounting system. Hope this helps.

StillTrucking, It's possible. Some of the big boys do it. But DCAA doesn't like it and you run the risk of having your timekeeping procecedures found to be inadequate. It's a risk and you have to evaluate whether the benefit outweighs the risk. But it can be done. H2H

I did some more research. There are people who take this sort of stuff seriously ... or at least seriously enough to write down a plausible explanation. I found this -- "C-beams are 'cutter beams,' a type of directed-energy weapon which slices ships apart. It's unusual to see them glitter because, like lasers, they don't generally shine at right angles to the beam path. Near the Tannhäuser Gate, however, there's a high enough concentration of interstellar hydrogen that a small portion of the beam will scatter so that an observer can see the beam path." Essentially then, the replicant was describing a space battle. Hope this helps.

Vern, Given that I've spent most of the past week in Spokane I could hardly miss the reference. http://sasquan.org/ I've decided to take the wife to Oregon next April, to visit the vineyards. If you and your wife are around, we'd love to take you to dinner! H2H

Thanks for the Blade Runner reference!

What about the film, Article 99? Here's a summary -- "When Dr. Peter Morgan (Kiefer Sutherland) begins his medical internship at a Veteran's Administration hospital, he expects to breeze through on his way to a cushy practice. Instead, he's thrust into a bizarre bureaucratic maze where the health of patients is secondary to politics. And the temperature really rises when he teams up with some freewheeling physicians, led by Dr. Richard Sturgess (Ray Liotta), who think they've learned how to break the rules-and save lives-without getting caught." H2H

Maybelline, You will be negotiating your contract with the Prime Contractor. If it were me, I would start (as you did) with 52.212-5 and then stop. I would take exception to everything not listed in that clause. Then I would wait to see how the Prime responded. At the end of the day, it is the Prime Contractor, not your company, that has the responsibility for complying with the clauses in its prime contract with the USG. That responsibility includes complying with applicable flow-down requirements. If the Prime fails in executing its responsibility, it has to suffer any consequences, not your company. Hope this helps.

Joel, retreadfed, policyguy -- I agree with retread and disagree with Joel. Here's my thinking. I believe that the "notification" discussed at FAR 3.1003( refers to a contractor disclosure as required by the clause 52.213-13. That clause dictates the when, where and how of a contractor disclosure. If "notification" means something else -- such as "brought to the Contracting Officer's notice" then there would be no need to specify the format of the disclosure, or to specify the recipients, or to discuss the content. All that language would be superfluous. And we know that we have to interpret the regulations as a whole, so as to give meaning to all words. So I think it's fairly clear that "notification" as contemplated by that clause and by the FAR subsection does not refer to anonymous postings on commercial websites. That is not to say that the Contracting Officer doesn't have responsibilities outside those prescribed by 3.1003 ... just that 3.1003 prescribes required actions given a certain, specified, set of circumstances -- i.e., receipt of a required contractor disclosure to the agency OIG. H2H

(a) Buying-in may decrease competition or result in poor contract performance. The contracting officer must take appropriate action to ensure buying-in losses are not recovered by the contractor through the pricing of (1) Change orders or (2) Follow-on contracts subject to cost analysis. (B ) The Government should minimize the opportunity for buying-in by seeking a price commitment covering as much of the entire program concerned as is practical by using -- (1) Multiyear contracting, with a requirement in the solicitation that a price be submitted only for the total multiyear quantity; or (2) Priced options for additional quantities that, together with the firm contract quantity, equal the program requirements (see Subpart 17.2). (c ) Other safeguards are available to the contracting officer to preclude recovery of buying-in losses (e.g., amortization of nonrecurring costs (see 15.408, Table 15-2, paragraph A., column (2) under “Formats for Submission of Line Item Summaries”) and treatment of unreasonable price quotations (see 15.405).

I agree with Vern but for different reasons. Look at the original post. An anonymous tip was left on a website. The tip involved possible product fraud (changing the dates of manufacture to avoid product expiration times) "on some of the products produced" but there was no specific allegation that government products were involved in the manipulation, if it occurred at all. Government safety inspectors will investigate to see if the anonymous allegations are true, and if the government was harmed. Until then, I would argue that the CO has not been "notified" as that term is used in the FAR section quoted above. Being cc'd on a series of emails (Re: Re: Re: Re:) is not "notification" in my book. Notification will take place when the government safety inspectors issue their report to the CO. To paraphrase Vern's comment, I wish I had a nickel for every time some chucklehead posted an anonymous allegation on the internet about somebody or something, and it went viral, and many people got upset, and then it turned out to be nothing because the original allegation was specious in the first place. Vern's advice, to notify the supervisor and document the conversation for the file, is spot on and commensurate with what the CO knows. At this point, there is no evidence, credible or otherwise, that points to any contractor criminal violations. Hope this helps.

metteec, I don't know if I've thought long and hard enough about this to give you a solid answer to your question. I'm wandering over to a position that says the item was commercial only if the government accepted the rules of the marketplace. When the government declined to acquire the commercial item in the manner offered by the marketplace, the item no longer qualified for commercial item treatment and should have been acquired by other than Part 12 procedures. What's my regulatory basis for that tentative, draft, and altogether preliminary position? Why nothing. But I'm circling around a notion that the item required such extensive modification to meet the government's unique demand that it no longer qualified as a commercial item. Maybe others will chime in and tell me I'm full of hot air. Wouldn't be the first time. H2H

Jeff, if the items are commercial and meet the test of 2.101, then it would be completely inappropriate to flow down cost allowability clauses in your subcontract. If you are acquiring a commercial item then you should be paying the commercial price as established through market research and/or competition. Why in the world are you concerned about the allowability of travel costs in this scenario? Hope this helps.

Interesting (to me) that this is a "true commercial item" but the government decided to acquire in a quantity less than the marketplace offered. To my limited way of thinking, the government should have established through market research what the "minimum buy" lot size was and then issued a solicitation for that quantity. In that way, the demand would have been aligned to the commercial supply. Because the government chose to buy in a quantity less than the market offered, it was not able to leverage the forces of the commercial marketplace. And now it has a problem. Makes me think that this item was not a "true commercial item" because the government declined to acquire in a true commercial fashion. H2H

jeff 4757 FAR Part 31 is invoked by the Allowable Cost and Payment contract clause (52.216-7). That is because FAR Part 31 applies to costs as recorded/incurred, not to estimated costs which have not yet been recorded/incurred. However, see FAR Part 31 Applicabilty, especially at FAR 31.102 and 31.103. Hope this helps