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here_2_help

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  1. TINA and Actuals

    I have some familiarity with this situation from the contractor's side. In our case the customer wanted actuals in order to develop its internal estimate for a future solicitation (so TINA requirements didn't play into the discussions). In each and every case, we ended up providing the actuals. At the end of the day, it was a relationship decision and the relationship trumped other considerations. The only remaining issue was that, since the prior award was FFP, the actuals were not structured/organized as the customer wanted to see them, making the customer's analysis more difficult than it had anticipated. To be very clear, that was not intentional; it was the natural consequence of the original contract type. But the end result was a frustrated customer, which was the result we had wanted to avoid.
  2. TINA and Actuals

    If the prior buy was on an FFP basis, then the contractor may be trying to argue that its actual costs under that FFP award are protected since the contracting officer doesn't have audit rights to examine data and records regarding actual costs in such circumstances. (See 52.215-2(b).) I'm fairly sure that restriction does not affect the contractor's requirements to provide accurate, complete, and current "cost or pricing data" as invoked by other solicitation or contract clauses.
  3. TINA and Actuals

    Restating the question to check my understanding: Does anybody know a case decided by the Court of Federal Claims, where the actual costs incurred by the contractor on prior acquisitions of the same goods were found to fall under the definition of "cost or pricing data" (or "certified cost or pricing data") for purposes of complying with the requirements of 52.215-20? Do I have it correct?
  4. Contracting Scandals

    Excellent use of a strawman argument! I congratulate you for successfully arguing against something I did not post. Please, proceed.
  5. A little guidance/advice please

    I'm not in government service but I work at a contractor that hires quite a few veterans. (I should note that the vets are some of the best people to work with.) In addition to Vern's sage advice, let me add that you seem to be doing all the right things to prepare for the transition, whenever it may happen. Regardless of your perceptions about experience and responsibilities, a veteran with contracting experience plus CFCM plus MBA will be desirable to many contractors. Based on your resume, you should have few problems getting interviews, especially if you are willing to relocate to where the jobs are. Hope this helps
  6. The ceiling on executive compensation found in 31.205-6 only pertains to the calculation of allowable compensation for purposes of determining total contract costs. Since we've already established that the distribution of profit occurs after total contract costs have been determined, that limitation is not relevant. As the FAR Council (and DCAA) is fond of saying, "We are not telling you how much to pay your executives. That's entirely up to you. We're only telling you how much of that compensation will be reimbursed by USG." Hope this helps
  7. paystubs

    Retreadfed, Thanks for the reference. I'm familar with that MRD. It was required because DCAA didn't perform its MAAR audits consistently when it stopped performing its audits of contractor proposals to establish final billing rates. It's tough to interview employees who left the company (or passed away) years ago. As you probably know, GAGAS 6.04b requires audit conclusions to be based on adequate ("sufficient and appropriate") evidence, and there were some concerns that maybe DCAA was taking so long to perform its audits, once it got around to performing them, that the information it was relying on was no longer adequate. (See DoD OIG audit report number D-2011-6-011, Sept. 21, 2011.) Thus, to address the concerns raised by the IG, the MRD was issued to give auditors additional procedures that would help to make the old information more adequate. To my knowledge, nobody has yet opined on whether or not the additional procedures correct the basic problem documented by the IG. (I should note that it was a DCAA auditor that first raised the issue by calling the IG Hotline.) To your point, yes. I see that "existence" is still an audit test. In my recent experience, though, the "existence" part of the audit is of lesser importance than the "interview" part of the audit.
  8. paystubs

    We do love to go down these semantic rabbit holes here, don't we. According to the court's decision, quoted above, facts = information. What is information? My entire point is that the contractor has fulfilled its duty when it discloses its facts in accordance with the requirements of FAR Table 15-2, unless the CO requests additional information necessary to support the determination of price reasonableness. If I have told you that Employee Number 1 makes $100,000 in annual salary, that is a factual disclosure, and I have met by disclosure obligation. Pieces of paper may be facts, but the contractor has flexibility to disclose those facts in the manner it chooses, consistent with FAR requirements. Once facts/information have been disclosed, any further inquiries about those facts fall into "verification" (at least in my mind). The verification activity would appear to have the purpose of confirming or refuting the contractor's assertion regarding the veracity of the facts/information it disclosed. I think it used to be called "fact finding" but I'm not sure if that term is used anymore. In any case, if you want paystubs to be certified cost or pricing data, then fine with me. I've already agreed that the government has audit rights with respect to certified cost or pricing data. Please do not take the next step of stating that the contractor has violated its disclosure requirements if it has failed to submit paystubs as part of its disclosure package.
  9. paystubs

    Vern, I'm not claiming to be a lawyer, but is it possible that the statutes and regulations are incorrectly using the term "fact" when the more precise term should be "factual evidence"? From my layperson reading, a Trier of Fact determines the facts of a case based on evidence presented. The facts are conclusions based on evidence, and are not evidence themselves. If facts exist outside of evidence in support of them, wouldn't they be beliefs instead of facts? In any case, when I prepare a cost estimate I use as many facts as possible. In order to determine those facts, I rely on documents (evidence). Sometimes I use judgment. When I submit a cost estimate subject to Truthful Cost or Pricing Data requirements, I tell the contracting officer how I developed my costing and price, and I tell them what evidence I relied on and when I used judgment. When DCAA comes in to audit my cost estimate, they ask for evidence to support my assertions--my "facts". They decide whether or not the evidence supports my assertions regarding the "facts". If I told the contracting officer I was using judgment, they will ask for technical assistance to express an opinion regarding the reasonableness of my judgment. I may be wrong but that's the way it's worked for more than 30 years. In my view, it would be unfortunate if the Trier of Fact were to henceforth be known as the Trier of Paystubs.
  10. I'm a bit confused here. Let's start with this statement about one of the contractor's executive officers: "... he receive 15% of the profit on the contract, after all other profit obligations have been taken care of." What are "profit obligations"? What are "other profit obligations"? As you recognized, in order to calculate the "profit of the contract" one would subtract contract total costs (which is a term defined at 31.201-1) from total revenue. At the end of the day, total revenue = total billings. So "profit of the contract" means what's left over after the contractor has billed (and presumably received) all payments. Therefore, it is not a contract cost. You noted that and you are correct. Therefore, you are also correct that there is nothing you can do about it. More to the point, why should the government care how a contractor distributes its profit? Raytheon and Northrop and Lockheed and many other publicly traded contractors distribute their profits to shareholders in the form of dividends. Many publicly traded contractors pay dividends in excess of 50% of their annual profits. That's just business. If this contractor is not publicly traded and owned by a few individuals, there is nothing wrong with 15% (or 50%) of the profits going to one individual. That's just business. Hope this helps.
  11. paystubs

    1. Paystubs are not facts. I think that's fairly clear. Paystubs are evidence supporting the amount an employee gets paid, or perhaps the quantity of hours that an hourly or non-exempt employee recently worked. But better evidence would be the certified payroll register, hopefully redacted to protect Personally Identifiable Information (PII), as Joel already noted. 2. From time to time DCAA performs a MAAR 6 "Labor Floorcheck" audit that I suppose has, as an ancillary benefit, a confirmation that employees actually exist. Other than that I haven't seen DCAA care about that subject in at least a decade, perhaps two decades. Companies used to have a control that required periodic issuance of paychecks via hand. Paychecks needed to be handed to physically present employees. That control went bye-bye with the advent of direct deposit. 2. If DCAA is concerned that employees on long-term telework assignments need to be confirmed, then of course home addresses are relevant. Home addresses might also be relevant in reviews of travel expense reimbursements and relocation expense reimbursements. It's hard for me to see how any of those purposes would have a nexus to an audit of a contractor's cost proposal, unless the contractor was proposing a home office expense somewhere. For me, the bottom line here is that a contract specialist who is concerned about reviewing employee paystubs has too much time on their hands and needs to be given more work to fill up the day.
  12. paystubs

    Vern, no. That stuff does not meet the 2.101 definition. Among other things, names and SSNs and addresses are not things that "prudent buyers and sellers would reasonably expect to affect price negotiations significantly." Yes, the government has the right of access to verify the cost or pricing data. See 52.215-2(c): "If the Contractor has been required to submit certified cost or pricing data in connection with any pricing action relating to this contract, the Contracting Officer, or an authorized representative of the Contracting Officer, in order to evaluate the accuracy, completeness, and currency of the cost or pricing data, shall have the right to examine and audit all of the Contractor’s records, including computations and projections, related to -- (1) The proposal for the contract, subcontract, or modification; (2) The discussions conducted on the proposal(s), including those related to negotiating; (3) Pricing of the contract, subcontract, or modification; or (4) Performance of the contract, subcontract or modification." (Emphasis added.)
  13. paystubs

    1. No. It is at most evidence in support of cost or pricing data. The fact is what an employee is paid. The pay stub is evidence supporting or refuting that fact. To support my position, I looked at the Instructions for submitting certified cost or pricing data at Table 15-2. With respect to direct labor, the Instructions state "Provide a time-phased (e.g., monthly, quarterly, etc.) breakdown of labor hours, rates, and cost by appropriate category, and furnish bases for estimates." Paystubs are none of those things. 2. No, not to my way of thinking. I don't see "paystubs" on the list of bona fide exceptions found at 52.215-20. But I already opined that paystubs don't meet the definition of cost or pricing data, because they are not cost data or pricing data: they are evidence in support of cost data.
  14. I would be surprised if anybody had any data to contribute to your analysis. Agile and scrum seem to be foreign concepts to most of the US Government.
  15. paystubs

    I don't think this is a black & white issue. To my way of thinking, the question is not whether the contractor can (or should) refuse the request based on privacy concerns but, instead, how the contractor might respond to the request without creating risk related to privacy concerns. It can be done easily. Redact employee names and SSNs and addresses, and retain the employee ID number, which should track to the employee pay information on the payroll register. If you have a decently sophisticated system, the employee ID number will track to the data (including pay rate) in the employee Master File. Thus, the employee ID number is the common link that permits audit review without revealing any employee private information such as SSN, home address, etc. Frontal assaults may work, but then tend to create casualties. Better slip around the flank by giving the Specialist what they want in the manner that protects the company (and the employee).
  16. Vern, in your opinion, is a business system determination made pursuant to 252.242-7005 a Contracting Officer Final Decision as contemplated in the Contract Disputes Act? Or is a contractor required to submit a certified claim to the contracting officer disputing that determination in order to appeal? From my research the DAR Council was not exactly forthcoming on that question. At 77 CFR 11361 (2012) the comment reads: "Nothing in the rule negates the contracting parties’ rights and obligations under the Contract Disputes Act and disputes clause, the availability of other avenues of dispute resolution, or the entitlement to Contract Disputes Act interest on contractor claims." However, I have never heard of any contractor actually appealing a business system determination. It's come up in some bid protests, but that's the only thing I've seen. I would hazard a guess that a 10% payment withhold is too onerous to sustain through a lengthy dispute/litigation process.
  17. I think you place too much confidence in the DCMA reviewers. Contractor horror stories about bogus deficiencies abound. As the OP noted, contractors will tend to agree to anything, no matter how patently wrong, if their business system approval is on the line. That mandatory 5% payment withhold is draconian.
  18. Some very good advice in this thread for any contracting officer that wants to understand whether or not a cost is allowable. 1. Is it reasonable in amount? 2. Is it allocable as charged? (Direct vs. indirect, direct vs. B&P, direct vs. IR&D, etc.) 3. Is the contractor's treatment consistent with its disclosed or established practices? Can it point to a company policy or procedure that supports its treatment? 4. If reasonable in amount and allocable as charged, and consistent with past treatment of similar costs, then (and only then) does it comply with the applicable cost principle or closest analog? 5. Finally, did the contractor propose the cost as it would like to claim it? If not, is there a good reason why not? (Things change; it may have been missed or not even contemplated when the contract was bid.)
  19. I suppose I could concoct a cost structure where every employee's individual fringe benefits (e.g., payroll withholdings, medical insurance costs, 401(k) match, etc.) followed that employee's labor charges. It would be a lot of work, but I bet it could be done. In that hypothetical, if the employee charged 100% of work hour time to one and only one contract, then the associated fringe benefits (including, in this case, tuition reimbursement) might then be charged to that one contract as a direct cost. Absent that scenario, I have a hard time understanding why the cost of tuition reimbursement would be allocable/charged to a single contract, rather than charged to an indirect account. To expand a bit, if the employee is attending on their own time then there are no labor hours to record to the contract. (If the employee was attending school during work hours, then there would be recordable labor hours; but I would question why they would be direct-charged to a single contract since, obviously, the employee wasn't accomplishing work in the contract's SOW.) If there are no recordable labor hours to create a nexus between the benefit and the contract, then the tuition reimbursement becomes an indirect employee benefit -- presumably part of the fringe benefit pool or overhead pool. Again, absent the hypothetical, above.
  20. When a source selection takes longer than World War II

    All this is absolutely correct. When I choose a consultant for a relatively undefined project, I am looking for knowledge, experience, and approach. Cost is a vanishingly small concern. So long as the cost is within the range of "reasonable" it's good. The government almost never takes a similar approach--and it should, in many cases. We have gotten away from the notion, which was in vogue 20 years ago, that the government and contractor were "partners" in their contracts. (Remember "Alpha Contracting"?) Until we walk away from the adversarial positions, enforced by policy guidance from current "leadership," we are not going to see fundamental changes in acquisition strategy, and we are going to see suboptimal outcomes.
  21. I don't know the answer to Retreadfed's question. But it seems to me that the government was harmed because it wanted three suppliers of these services and ended-up with only two. Does the awarding Agency have the ability to issue a no-cost T4C and then award to the next highest offeror? I don't know. But that approach, or one like it, seems like the most logical way to proceed.
  22. Vern, No argument from me. The question for the trier of fact would be whether the offeror had a reasonable basis to believe that its clients would grant a waiver. That's a difficult question to answer and it would be better for the parties to settle their differences out of court.
  23. Unless ... the Agency was induced to make the award based on a fraudulent representation "The awardee did state in their proposal that they did represent clients that were adverse to the Agency, but did not believe such representation would preclude them from representation of the Authority and if given the opportunity, they would obtain waivers from these clients."
  24. Section 102. Wow. "The bill takes aim at incurred-cost, which aides say are slow, time-consuming and do not deliver substantial enough returns for the taxpayer. In 2016, it took 885 days for the Defense Contract Audit Agency to complete these audits, which accounted for “a pretty small percentage of the net savings the DCAA brings to the government,” an aide said. The bill's three-tiered answer would be to: Let contract officers choose either DCAA or outsource to a qualified private sector auditor. Raise the contract-value threshold that requires such audits. Require the audits to be done within a year, so to encourage contractors to focus on high-risk audits."
  25. Uh, not where I work. Where I work, the customer expects us to comply with the rules and not bother them with the details. Nobody has the time or budget to get written PCO approval for the reasonableness of every little thing. (Obviously, advance consent is required where required.)
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