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elgueromeromero

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Everything posted by elgueromeromero

  1. This is an IDIQ with USACE. It seems that you're suggesting Option #1, correct?
  2. The Gov’t has defined “fully loaded labor rates” as direct rates plus applicable indirects. So the price to the Gov’t prior to adding profit. Same applies with the Sub rates.
  3. This isn’t a T&M or LH contract. It’s a FFP IDIQ with maximum labor rates to be used when pricing FFP task orders.
  4. We have an FFP A/E IDIQ contract that includes a list of "maximum fully loaded labor rates for the Prime and Subcontractors". We've been selected to provide a price proposal for a Task Order and we're in the process of setting up a subcontract with "Sub A". My question pertains to what is acceptable (allowable?) when it comes to the labor rates we use to price the TO proposal. If, for example, we're using "Sub A" for a particular labor category in which our maximum contract rate is $150/hr, but Sub A has proposed a rate of $125/hr, are we able to still use our $150 max contract rate to build up our price, or would we need to use Sub A's actual rate of $125? Alternatively, is Sub A allowed to build their price using our $150/hr contract rate even though their actual cost is $125/hr? Also, provided Sub A's person meets the qualifications for this particular labor category, do we even need to disclose to the Gov't that we're subcontracting out that particular labor category? Note that this is a FFP/lump sum TO estimated at $150K where labor is only a portion of the price. Also worth noting is that Sub A provided its $125/rate during the RFP phase for the base award, but because this was an overlapping labor category (in that it is one in which both us as the Prime and Sub A may use), we proposed our higher rate of $150/hr because the Gov't said they only wanted one rate for each labor category. It seems that there are three ways to handle this: 1. Propose the sub's actual rate of $125/hr. 2. Propose the max contract rate of $150/hr but issue a subcontract to Sub A with their originally-proposed rate of $125/hr, in which case we as the Prime would keep the difference as profit. 3. Propose the max contract rate of $150/hr and issue a subcontract to Sub A with the max contract rate of $150/hr, in which case Sub A would keep the difference as profit. Thanks in advance.
  5. UPDATE: GSA just issued an amendment to clarify that the Mentor Protege agreement has to be approved prior to submission of the offer, not the Joint Venture agreement. Disregard my original post--I was wrong. The regulation states that the Mentor-Protege Agreement has to be approved prior to award. I thought I had read that the Mentor-Protege Joint Venture agreement had to be approved prior to award. Huge oversight on my part.
  6. Wow--interesting. Thanks for this reference. I have read this section before but didn't catch what I think you're pointing out, which is this part, correct?: If the procurement is to be awarded through the 8(a) BD program, SBA must approve the joint venture pursuant to § 124.513. This does have an impact on my analysis in that it seems to create some ambiguity and confusion by contradicting 124.520(d)(1)(i)). 13 CFR 121.103(h)(3)(iii) first references 124.520 but then jumps to § 124.513 when discussing approval of the joint venture, when it seems they should have instead referenced 124.520. I still think that there's a distinction in the regulations between the requirements for 8(a) Joint Ventures and 8(a) Mentor Protege Joint Ventures; however, this apparent oversight by SBA that you've pointed out does confuse the issue and may give interested parties a better chance of succeeding in a solicitation protest. And I can almost guarantee that this RFP will get protested for this very issue.
  7. The following is from the GSA OASIS 8(a) Sub-Pool On-Ramp RFP: For Mentor-Protege JVs, the SBA must approve the Mentor-Protege Agreement before the firm may submit an offer (reference 13 CFR 125.9(d)(1)(i), 13 CFR § 124.520(d)(1)(i)). For 8(a) Joint Ventures where all members are small under the applicable size standard per 13 CFR 124.513(e), the SBA must approve the JVA prior to award, not prior to submission of an offer. This requirement is causing a lot of heartache for 8(a) Mentor-Protege JVs. A lot of folks (including consultants and contracts attorneys) are saying that GSA is violating SBA rules in that they can't require approval of the 8(a) Mentor-Protege JV prior to submission of an offer because the regulations state that approval must happen prior to award. Of the 369 questions and answers provided in Amendment 04 Q&A, probably 20 of them were directly related to the above requirement. Admittedly, I also initially thought that GSA was going against SBA regulations with this requirement. Then I dug more into the regulations and now I actually think that GSA is correct. Here's why: GSA is essentially stating that 13 CFR § 124.513, which allows SBA approval of the 8(a) agreement prior to award doesn’t apply to 8(a) JVs formed under SBA’s mentor-protégé program, but rather 13 CFR § 124.520 and 125.9, which require approval of the JV agreement prior to submission of an offer, applies to 8(a) and SB Mentor-Protégé JVs. 13 CFR § 124.513 is almost entirely silent on Mentor-Protégés, whereas 13 CFR § 124.520 and 125.9 are specific to the Mentor-Protégé program. So the regulations contain two distinct requirements with respect to SBA's approval of joint venture agreements: If you're an 8(a) JV (meaning both or all members are 8(a) Participants) SBA approval of the JV agreement is required prior to award. If you're a Mentor-Protege 8(a) JV, SBA approval of the JV agreement is required prior to submitting an offer. Do you agree with this interpretation? If not, why?
  8. Our consultant (who's a former DCAA auditor) is telling us that DCAA's interpretation of 52.216-8 Fixed Fee (Jun 2011) is that the contractor is required to withhold 15% of the fixed fee, that the 15% is mandatory, and if contractors don't do this, they'll be cited with an accounting system deficiency. She's consulted for several other contractors and said that one of them was recently cited with an accounting system deficiency for this very reason, which was fully supported by the DCMA ACO. My interpretation of this clause is that it does not impose any kind of obligation on the contractor. The clause does contain a requirement for the Contracting Officer to withhold a certain amount/percentage of the fee, and to release a certain amount/percentage as stated in the clause, but there’s no obligation for the contractor to withhold any of the fixed fee (i.e. underbill the Government on the fee). I think the contractor should bill the full amount of the fee and the Contracting Officer is responsible for withholding the required amount of fee from payment. If the contractor were to underbill the fee, there would be nothing for the Contracting Officer to withhold. If the Contracting Officer doesn’t do any withholding of the fee, that should be on the Contracting Officer, not the contractor. Our auditor then told me that DCAA pamphlet 7641.90 ("Information for Contractors") also states that it's the contractor's responsibility to withhold 15% of the fixed fee. I reviewed the manual and it doesn't actually state that, but rather refers back to FAR 52.216-8 and provides a sample voucher where the Contracting Officer has designated a 15% reserve for the fixed fee. I certainly don't view this sample voucher as direction or a requirement for the contractor to withhold/underbill 15% of the fee. While a withhold amount less than 15% is apparently almost unheard of, the FAR does state that the amount of the withhold is a subjective "not to exceed 15%, or $100,000, whichever is less, to protect the Government's interest", so the reserve technically could be a lower percentage, based on what the Contracting Officer feels is adequate to protect the Government’s interest. That DCAA could cite a contractor for not doing something that isn’t required by contract is very frustrating and concerning to me. The clause/regulation states as clear as day that the Contracting Officer is to withhold a reserve not-to-exceed (discretionary amount) 15 percent of the total fixed fee, which is why I’m surprised that DCAA could expect contractors to interpret that to mean that the contractor must voluntarily underbill the fixed fee by exactly 15% (a non-discretionary amount). And apparently if contractors don't do the mental gymnastics required to arrive at this same bizarre interpretation of the clause, DCAA will cite the accounting system as deficient and may even require repayment of the fee reserve that "should have been withheld". I should also mention that our company has had several CPFF contracts with both the DoD and EPA over the years and we've never been required to withhold a percentage of our fixed fee from billings and have also never had any portion of fee withheld by the Gov't. I'm not saying it shouldn't have been withheld (it should have), but it just hasn't happened. Am I missing something here?? Has anyone else had to deal with this?
  9. Thanks, Help. I really appreciate your thoughts on this. And thanks for your contribution to this site. I can't tell you how many times I've found answers to these types of questions by coming here and reading your comments.
  10. Yes, it's a CPFF and 52.216-7 will be included. The indirect rates aren't fixed--they're actually ceilings. The Gov't is calling them capped rates. I apologize if I said they were fixed or made it sound like they're fixed. So we can bill at our actual indirect rates up to the ceiling/caps. Hopefully that clears things up.
  11. They're ceilings. The Gov't is calling them "capped rates". Yes, we will bill at our actual rates up to the NTE ceiling rates.
  12. The proposed indirects are ceilings for proposal and billing purposes. So we can bill actual indirect rates but NTE the ceiling/capped indirect rates established in the contract. Does that clear it up?
  13. Retreadfed, the indirects proposed by each offeror will be the established capped indirect rates for proposal and billing purposes on task orders should the offeror be awarded a contract.
  14. I'm sorry, I misspoke. We aren't covered by the requirement for cost or pricing data as this is a competitive procurement. From what I understand, we also don't have billing rates. We have very few cost-reimbursement contracts so we calculate our rates on a contract by contract basis, and usually just end up using our most recent DCAA-accepted rates. What you're saying makes sense. However, our experience has been that Contracting Officers almost always want to see SOMETHING from DCAA, and our "accepted" rates letter from DCAA is what we typically provide. I think it gives the Contracting Officers a sense of security to see that DCAA has reviewed our rates and accepted them. The impression we get is that they expect our proposed rates to match what DCAA has accepted. But you're saying that we shouldn't rely on these rates as they likely aren't the most current, accurate, and complete data, which seems to make more sense given we don't have an FPRA. So back to my question, would you suggest that we forget about the rates we used in our initial proposal and that we update our rates for our final proposal revision to reflect" a current projection of future rates, based on anticipated costs and anticipated revenues"?
  15. We used our 2016 incurred rates to come up with our estimated cost for a CPFF proposal. DCAA did an informal review (not a full-blown audit) of these rates and they were "accepted". It's been about a year since we submitted our proposal and we finally received notice that we've been included in the competitive range and we're now in negotiations with the Gov't. We now have DCAA-accepted 2017 incurred indirect rates, which have changed slightly from our 2016 rates. I don't know if we should use the 2016 rates that we originally used to estimate our cost for the proposal, or if there's some expectation or requirement that we update our rates to the more current 2017 incurred rates. The RFP and negotiations letter are both silent on this matter.
  16. The costs obviously don't benefit other contracts, but my question is whether they somehow benefit the contract in question. If so, then I think we should be able to charge the costs as direct costs. If not, then I don't think they pass the test for allocability and we therefore can't bill them as direct costs. Am I missing something? Probably. That's why I came here.
  17. We have several CR contracts. Yes, we have other contracts that are subject to the cost principles. The invoicing concerns in this situation are related to direct costs. I believe for actual full-blown audits, the costs are accounted for as indirect costs (not 100% sure on this). Our contract is silent on this issue. thank
  18. The Government is auditing several previously submitted invoices (some paid, some pending payment) on our CPFF contract. They are requesting that we meet in person as they have several questions on our invoicing process and they claim to have found several discrepancies in some of our invoices. In the request for the meeting they stated that they don't think any costs incurred for travel or time associated with explaining and defending our billing processes and these discrepancies should be chargeable to the contract. Are these costs typically allowable? This seems to be sort of a gray area. I've reviewed FAR 31.2 and it seems to come down to whether these costs would meet the following test for allocability: (a) Is incurred specifically for the contract; YES (b) Benefits both the contract and other work, and can be distributed to them in reasonable proportion to the benefits received; or ?? (c) Is necessary to the overall operation of the business, although a direct relationship to any particular cost objective cannot be shown. ??
  19. Yes, I understand this. I was thinking more in terms of what should have been included in our subcontract when I cited this. Our subcontract includes a laundry list of FAR clauses and says to flowdown "to the extent applicable". We'd like to avoid scaring off a small company providing a commercial item with a bunch of unnecessary FAR clauses. If our subcontract gives us the discretion to flow down clauses "to the extent applicable" , couldn't we justify that the only "applicable" clauses in our subcontract that should be flowed down to our subs are those that are included in 52.244-6, since those clauses are the only clauses that are really applicable to a subcontract for a commercial item?
  20. Correct, we have a subcontract with a company who holds the prime federal contract. There are a number of clauses listed under the "flowdown" section of our subcontract with the prime, but this section states that they are to be flowed down "to the extent applicable". So because we don't have privity of contract with the federal agency, and because the prime didn't include 52.244-6 in our subcontract, we should ignore FAR 44.402(b) and basically go through all of our clauses and flow down all that include a "shall include in all subcontracts" prescription (as applicable)? So we'll end up including clauses that wouldn't normally be flowed down to a commercial item subcontract, such as 52.225-13 Restrictions on Certain Foreign Purchases, for one example.
  21. Background We were issued a subcontract from a 1st-tier federal subcontractor to perform construction work. FAR 52-244-6 was not included in our subcontract. Now, we're about to issue a commercial subcontract and we're wondering if we should include the flowdowns listed in 52-244-6 that should have been in our subcontract. There are other clauses listed in our subcontract, but in light of FAR 44.402(b), I think that only the clauses listed in 52-244-6 need to be flowed down to any subcontract for commercial items/services. Question Should we flow down the clauses in 52-244-6 in our commercial subcontract even though that clause isn't in our subcontract, or do we need to go back to the company that issued the subcontract to us and ask that they modify it to add FAR 52-244-6? Or are we not obligated to flow down any FAR clauses?
  22. Is there any regulation, legal precedent, or OCI issue that would preclude a contractor from receiving two awards under the same IDIQ contract and then subsequently competing for task orders under the IDIQ? Background: The Gov't issues an IDIQ that consists of two pools: Small Business and Unrestricted. The RFP states that some task order competitions will be set aside for the SB pool, and others will be Unrestricted, and that the Gov't anticipates a total of 10 contracts will be awarded (5 SB and 5 Unrestricted). The RFP goes on to state that for the Unrestricted task order competitions, the SB IDIQ contract holders may compete against the Unrestricted IDIQ contract holders. Let's say there's a LB contractor who submits a proposal for the Unrestricted pool, and then also submits for the SB pool under a SB Mentor-Protege arrangement. Also, let's say the Protege under this Mentor-Protege arrangement will be a named team member/subcontractor under the LB contractor's Unrestricted contract. Is there any issue here with regard to OCIs, limiting competition, collusion, etc? If the LB had a good reason to want to submit a proposal from both the Mentor-protege entity and the LB entity for an Unrestricted task order competition, is there anything that would preclude it from doing so? Thanks in advance.
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