here_2_help

My opinion is that your indirect employees need to comply with this requirement if your grant(s) contain the Fly America clause, 52.247-63. or equivalent. (And they should because the statute expressly says the Act is applicable to grants.) Compliance with the requirement should not be that big of a deal. First, it's a "preference" for certain carriers, and the Act (as well as the associated clause) provides an escape where US-flag carriers are not available. Second, there are a number of international carriers who qualify as US-flag carriers based on international agreement. See the GSA list of "Open Skies" agreement partners http://www.gsa.gov/p.../content/103191 So compliance should not be that big of a deal. But if your indirect people traveled in violation of the Act, I would not claim the associated airfare. Hope this helps.

MBrown, I wonder if your question was somewhat rhetorical? I mean, we all know that the FAR Councils promulagate rules that are inartfully written and contain ambiguous language. Why do they do it? Because they can and nobody is looking over their shoulders, pointing out opportunities for improvement. Because politics play a role. The public is invited to provide comments and some of those comments are cogently critical, but the rule-makers seem to delight in ignoring the public input and moving ahead with their planned rule-making. I was thinking about this recently, in looking over the public comment and the FAR Councils' responses with respect to FAR Case 2008-020 (FAC 2005-52, May 2011). Here's an example of what I mean -- Comment: One respondent recommends rescinding the proposed rule and revising the approach to determining adequacy. The respondent states that the approach taken to set forth a description of an adequate final indirect cost rate proposal and supporting data fails to improve the process and unnecessarily creates additional and very significant process and administrative problems. Response: The rule will provide uniformity and consistency. Further, the information is not new and should be readily available from the contractor's books, records, and systems. I could rant and rave about why that response was wildly inappropriate, but suffice to say that it has become clear that the requirements being discussed are not readily available from contractors' books, records, and systems -- and that they are becoming a signficant source of increased indirect costs for the contractors I work with. And that's just one example out of many -- just see the comments and responses to the fairly recent DFARS "business systems" rule-making. So that's why.

I don't see any problem with the prime CA and the SCA being the same person, so long as the company's policies/procedures/instructions are separate. That's an efficiency/cost savings thing, and would be especially applicable in a smaller business where there might not be workload for a FTE in each silo. Besides, that's the way we did it (a while ago) in a previous major DOD contractor. The boss' philosophy was that every acquisition professional should be able to manage a prime contract or manage a subcontract or procure goods/services. And that's the way he organized the department. Passed every CPSR, too. Granted, that was then. But I don't see where having one person perform different functions IAW different/separate command media/standards would be an issue. Hope this helps.

You know, I had an answer and was well into typing it. Then I thought of another way of looking at it and came up with an equally valid answer. Then I realized I couldn't answer the question because ... as Vern succintly says, it depends. It depends on the contract language. H2H

wayforward, I don't have the legal cites in front of me, but the case law is fairly clear that you must notify your customer in advance of exceeding cost limitations, to include impacts from final indirect cost rate adjustments. The only exception I can think of is when the company had no reasonable way of foreseeing what the final indirect rates would be. That last bit does not happen very often, and from your post I don't think it would apply here. A contractor knows its actual YTD rates as costs are incurred during the year; it knows its year-end rates when the books close. And it knows the (certified) rates it submitted to the government for audit. Given the above, why do you think that anticipated rate adjustments are unknown? Sure, in this case there were 5 contractors to manage, but I think the job was feasible--if somebody had known what they were doing and made sure that the team managed rate variances and timely reported the estimated impacts to provisional biling rates. This issue was just discussed on LInkedIn. The consensus was that a contractor should request a rate adjustment at year-end and again when it submits (certified) final indirect rates. (See FAR 42.704(e).) Also, 52.216-7(e) requires that (provisional) billing rates be adjusted as necessary so as "to prevent substantial overpayment or underpayment." How did the JV comply with that requirement? Finally, think about this. What if the rate impact had gone the other way and everybody had been overbilling the government customer? Have you looked at the requirements of 52.232-25(d)? If you and the rest of the JV team had been found to be in noncompliance with those requirements, do you think it would have gone well? (Hint: Check out the WIFCON's news links from earlier this week, or just Google "Calnet settlement".) I am usually on the side of the contractor. But in this case, I don't see any argument to be made other than that the JV's Managing Partner failed to properly manage the contract and to comply with contract terms and conditions. Hold the Managing Partner accountable; make that firm cover any losses suffered by the other JV members from its incompetence. Hope this helps (though I suspect it won't).

amthornf, I don't have a problem with the DCAA audit guidance you reference (or at least, not with the part of it that you quote). IOTS (or whatever you want to call them) are a make and not a buy. See FAR 15.407-2(. Hope this helps.

More to the point, how do you reconcile the description of the practice with the requirements of 31.205-26(e)?

You know what? I like ji20874's advice. I often advise folks to use the weighted guidelines to their advantage in profit/fee negotiations. You know the DOD negotiators will be using it, why not complete one and use it to support your position? As was offered, you can just claim the high end of the range for every category. And even then, you can propose the profit/fee that you want, regardless of what the form says. Good stuff.

Suggest you notify the CO that the COTR has directed a change to contract terms and request confirmation. Then submit an REA for the additional costs of complying.

Not a government employee, but I have a lot of experience in the private sector. In my experience, when an employee satisfaction or similar type survey receives a very poor response rate, it indicates a very serious workforce morale issue. People feel like management isn't interested in honest feedback, or will fail to take meaningful action upon receipt of honest feedback. It indicates a profound disconnect between management and the workforce. I don't know if this situation is similar or not. Maybe there are a ton of other reasons for the lack of responses--and workload is probably a good reason. But if this was my company and my survey, and this was my response rate, then I would be very, very concerned.

I think the best practice is to define the term in your policies/procedures/instructions, and then follow your definition consistently.

I can understand DCAA's refusal to perform CAPA if the value of the subcontract is below their recently revised audit thresholds (which are $10 million FFP/$100 million CP). But what I don't understand is why DCMA refuses to perform CAPA. I can't help feeling there's more to this story than is being posted. H2H

I was going to suggest going for a FFP mod and then using "accord and satisfaction" to stop any future cost claims. But the problem is that I don't know what the contractor's issues are. Is everybody waiting for a DCAA audit of the subKs in order to finalize rates/costs? (If so, you will be waiting a long, long time.) Is the missing documentation likely to be found? Has the contractor shown you a project schedule that has some credibility to it? It's hard to recommend a good course of action when the circumstances aren't known. Wish I could help more.

I look at proposed legislation but really don't get worked-up about something unless it looks like the President will sign it. I have a very hard time getting worked-up about DOD's recommendations for proposed legislation. There's just too much sausage that still has to be made. H2H

Don et al, Yes. I agree with your point(s) and stand corrected, so long as we are dealing with a deductive change and not a termination in fact that is masquerading as a deductive change in order to avoid the T4C administrative requirements. I noted that the deductive change terminated the task order, and keyed on that fact. I agree with Vern's comment that this is "okay as long as its okay with the contractor." Were I that contractor, then, depending on the circumstances, it might not be okay with me. But again, I agree with the comments regarding deductive changes. H2H

Hi tguns, You know, the action being contemplated here strikes me as a T4C situation. If it were being handled as a T4C situation, my understanding is that the contractor would only receive fee on accepted work, but would receive (after a negotiated settlement) actual incurred costs plus settlement expenses. But you didn't want to go that route. Instead, you descoped the PoP. Now the contractor will incur (and bill) you less costs. Since the fixed fee was fixed and should not vary based on costs incurred, I would expect the contractor to be able to bill the entire fixed fee amount. Hope this helps.

"In order to achieve no impact, they are considering charging the contractor for all the contract administration which would then free up the funds for the regular program of work to fund a contractor to perform that work. All inherently governmental functions will remain with the government." Would it be fair to characterize this situation as "pay to play"? H2H

I would like to understand why this was not considered to be a T4C situation. What was the thinking?

In my view, if the BOE stated that the staffing was based on "closeout experience with other programs" then the other programs should have been identified, and actual labor hours for analogous tasks should have been provided for analysis. The contractor's failure to submit the information violates the requirements of FAR Table 15-2-- "The requirement for submission of certified cost or pricing data is met when all accurate certified cost or pricing data reasonably available to the offeror have been submitted, either actually or by specific identification, to the Contracting Officer or an authorized representative." Hope this helps.

Vern asked in his original post whether entrepreneurial government was a mistake. I think that question misses the fundamental point. Entrepreneurial or prescriptive, unchecked government with lax internal controls and ineffective oversight is always a mistake. Same holds true for private industry, tool. As Boeing, Enron, and many others have learned. Same holds true for military command, though I'm not qualified to judge. H2H

Retreadfed, I'm sure you are correct. Just waxing nostalgic for a minute, based on your comment. H2H

Retreadfed, "Generally, contractors can only receive an equitable adjustment for contractual acts of the government. Generally, sovereign acts of the government do not entitle contractors to an adjustment." Remember when GD sued the Feds for $26 million under the Federal Tort Claims Act for DCAA professional malpractice? (Sergeant York, DIVAD) They won, for a little bit (reversed on appeal on other grounds). Good times, good times. Hope they come again, real soon. H2H

Assuming you are a contractor, the answer is "it depends". It depends on your disclosed or established practices, it depends on whether the affected employees normally direct charge, it depends on whether you want to upset your customer. In short, there is nothing in the regs that would prohibit you from doing so, unless the matter has ripened into a legal proceeding--in which case not allowable. Hope this helps.

Postaward, I think that the issue is not whether the contractor's offer was accepted, but rather whether the contractor's invoices complied with contract terms. They did not. However, the contract mod will allow the contractor to bill employees at T&M rates appropriate to the employees' qualifications. This reduces the value of the "non-conforming" hours that were billed, but not as much as if the government rejected all non-conforming labor hours (a decision which was likely within its rights). The mod acknowledges that the government received value for the services provided, just not as much as the contractor had originally billed. In my view, the government's request for an additional $500 has little to do with consideration, and more to do with sending a little message regarding the contractor's misbehavior. It's a very small penalty--almost a gnat's bite--but it does communicate to the contractor that its misbehavior was wrong. There's really no need for the little sting, but if that's the only price the contractor pays, it's well worth it. (I wonder what the CPAR report will say...) Hope this helps.

Thanks for the new info. It's always nice to get all the facts. Based on your new facts, I would pay the mod and thank my lucky stars that there was no Form 2000 referral to the Department of Justice. You do realize that many law enforcement personnel would describe your "non-conforming labor costs" as a false claim, right? H2H