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We recently had an assistance visit from GSA, during which time the auditor flagged one of our contracts for overpayment. It is a FFP contract, base + 3, under a GSA schedule. The contract has a 3% escalation for each option year - unfortunately our GSA schedule has no escalation. We typically discount off our published rate but in this instance did not. Neither our contract nor our invoices contain any rate or hour information - we were simply funded a total FFP and invoice equal monthly installments. The only place that indicates any rate information is a cost buld-up found in the file (contract started 4 years ago and no one who worked on it is currently at the company), no indication that this was the final cost proposal submitted to the government. The contract CO or COR has never flagged and all invoices have been paid. A large portion of the work is being performed by a subcontractor. Based on the above, do we have an argument against the overcharge claim? We would be looking at paying back several hundred thousand dollars as we are in the last year of the contract. We do have a clause in our subcontract that would allow us to recoup any money repaid to the government, but I would assume the sub will fight us on it. A related question would be how difficult is it to mod our GSA schedule prior to any option period? Could we add a rate escalation clause and other labor categories in the middle of the contract? If so how long does that process typically take? And could any rate escalation be retroactively applied? Thank you for your help in advance, sorry if any of these are basic questions as I am new to contracting
