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Found 16 results

  1. Good Morning, This is my first post, we are a small IT firm and may have our first subcontract using CPFF where we are the Prime. I was wondering if there are standard forms we should be asking our sub for. This is what I know that I can ask for : 1. DCAA certified rates 2. Letter of both an approved purchasing/accounting systems. 3. Organization Conflit form 4. Reps and Certs - does anywhere have a template that covers everything - do we need one ? 5. Flowdown Clauses ? Any help would be appreciated and welcome since I am not sure what I need to have ready Jennifer Caruso
  2. I would like some help with the probable outcome for this question. A CPFF term contract for $60MIL incrementally funded. The Government funds only $30MIL and extends the contract twice to continue performance, but still does not reach the full obligation. Now the contract is ending and no more funding will be obligated. The Schedule Obligated Amount clause says that the funds are allotted for "allowable costs (and fee if any)" (emphasis added). The contract includes the LOF clause 52.232.22. The Contractor realizes it has made an accrual mistake in the accruals of incurred costs and has a deficit of $1MIL over the obligated amount if you include the earned fee. Without counting the earned fee (CPFF term = LOE delivered x fee per day), the Contractor has incurred costs within the obligated amount. The performance was accepted and lauded by the client as Exceptional. The Contractor mistakenly relying on available funds numbers offered to the Government and with acceptance performed more work than originally planned for the same obligated amount. The Government argues that since no timely notification under the LOF clause was provided, the costs would not be reimbursed since the obligation covers costs and fee and the Government is not obligated to reimburse above the obligated amount. Cost Reimbursement Contracting (Cubinic and Nash) states under Control of Funding Limitation of Funds clauses, that if the "funds are allotted in a single figure, it has been held that the contractor can apply the full allotment to performance costs". Would this argument work in the scenario above? If the Government refuses, is this a legitimate claim argument? Many thanks.
  3. All, I have a CPFF contract for which my company did a voluntary cost share. The cost share portion of the contract covered primarily material and some subcontract services/supplies. Should there exist residual material on this contract that falls under the cost share (everything has been properly segregated is it handled as a typical CPFF? I.E. even though the material was funded by the cost-share portion of the contract does it belong to the government? Or would the material purchased under the cost share belong to the contractor? Is there any FAR support for this type of situation?
  4. Anyone know of an online resource that shows all the changes to the FAR and its preceding regulations? I'm looking to see when and why the following at FAR 16.306(a) was incorporated: "The fixed fee does not vary with actual cost, but may be adjusted as a result of changes in work to be performed under the contract." The reason I am looking for this is because I'm having a discussion about including a special clause to a competitive source selection. This special clause works as a negative incentive where if the firm does not comply with the terms and conditions of the contract, this clause would be enforced and the contractor would lose at least a specified portion of the fee per the clause. The intent of this clause is to encourage the contractor to put more focus on its administration of the contract but if they do not, the Government has a way to enforce non-compliance quickly vs. handling this in a sole source post-award environment (where getting consideration is often a time consuming effort). I am being told I can only use the applicable termination clauses to enforce non-compliance because FAR 16.306(a) specifies when the fee can change. While I agree the text states that the fee is fixed at time of award and doesn't change unless changes in the work occur, it is not clear to me whether the writers were considering post award administration issues that may arise and whether they would not agree with this type of clause being added to the contract. To me, the fee is fixed provided the contractor and Government adhere to the contract. If either party changes the contract or does not adhere to it, consideration is required. I don't think this type of clause violates the intent of the CPFF contract type based on that understanding. All this clause does is resolve the consideration issue for a specific issue when non-compliance occurs in a post award environment. Sometimes understanding the context as to why the language was incorporated can provide better insight and help me know if I am off base or not. Any insight, recommendations, or thoughts are welcome. Note: This clause does not override the termination clauses, it merely sets a floor as to what the minimum consideration would be for non-compliance.
  5. All, I'd like to get your opinion on a disagreement we are having with one of our DCMA folks. We have been performing under a CPFF contract since 1/1/14 which includes the 52.216-8 clause, and our KO has not withheld any payment of fee to date. DCAA recently audited the contract records, and deferred the question to DCMA on whether or not things have been handled appropriately. Our DCMA POC's answer was simply an e-mail stating "15% fee withhold is mandatory. The contractor has overbilled and no more billing is permitted. It is mandatory, that 15% of the fixed fee be withheld until such time as the Contractor's 2014 Incurred cost proposal is deemed adequate." I contacted the DCMA POC and stated that I don't disagree that the KO should withhold payment up to the 15% or $100K as the FAR clause indicates, but I contested the fact that he is claiming that "contractor has over billed and no more billing is permitted", stating that the onus is on the KO to withhold payment rather than for us to withhold billings (as an aside, our KO expressly told us not to do so). Am I crazy here? In the past, we automatically retained 15% on all CPFF jobs we had which contained that clause, and our DCAA auditors dinged us for doing that and our KOs got angry - it's like we can't win! Please let me know what you think. Thanks for the help!
  6. Unfavorable CPARS rating

    We have an 8(a) company who for the last two years, received an unfavorable CPARs rating. The requirer wants to modify the current contract (which is a CPFF, runs out Dec 2015) by extending the period of performance for another 30 months and giving contractor approximately $6M (due to the funds expiring 30 Sep). We have explained (to no avail) that if we try to use the adverse info in a future past performance evaluation, the contractor can point out that the performance problems must not have been that bad, since the Government turned right around and extended the contract for a considerable amount of time. They could also argue against any use of those ratings in ANY meaningful way. They could also argue that they did have performance problems but they fixed them (which they have not!), as evidenced by the Government's show of confidence in the contractor by way of a sizable contract extension. Our proposed course of action is to let the current contract expire in Dec 2015, and initiate a new contractual effort with another contractor to complete what wasn't accomplished on the existing contract. However, that doesn't solve the issue of losing $6M in funding. Another course of action that has been suggested is to do a UCA with another contractor to complete what wasn't accomplished on the existing contract (thereby freezing the $6M funds) and award sometime after the existing contract ends. Needless to say, this is much more complicated than I have written down but I tried to keep it simple. I am looking for any suggestions that might get us both (requirer and contracting) what we need.
  7. Staffing - temp agency

    I wasn’t sure where to post this question, but thought this was a good place to start. First, let me describe our situation. · We are a small business with a CPFF contract · All staff members are at the Client site · Contract requires Client approval of all new personnel (sometimes done via resume review – sometimes direct interview of candidate) · All positions require a security clearance and fairly unique skills (i.e., difficult to fill positions) · Contract includes a Consent to Subcontract clause · We have several large business subcontractors · We have had difficulty filling several positions and our large biz subs have failed also Since we (and our subs) cannot fill open positions, we have considered using a staffing agency. A typical headhunter fee is 20% of the first year salary. Paying $20K for a $100K employee is not affordable – much less when you multiply that times 4 or 5 positions. Several staffing companies have offered an alternative approach which they assure us they do for other government contractors. They will employ the candidate for 6-9 months at a certain rate after which the candidate comes to work for our company. During that 6-9 month period, the company earns their fee through the hourly rate – meaning the fee is absorbed as a direct cost, not indirect. The problem is that the new hire is not our employee. Our invoices clearly indicate each employee by name and employer (with appropriate indirects and fees), so the individual’s employer would be clearly visible to the client. We have no desire to do anything underhanded or deceptive - we just need a way to fill these positions. Headhunters have huge databases and recruiting methods that even our large business subs cannot duplicate. So, the question is – can we use a staffing agency in our situation, and if so, how? An obvious answer is to add them as a subcontractor. But that is a process that takes a significant amount of time and effort (and is discouraged by our client – especially approaching the end of the fiscal year). The staffing agencies say they “do this often” with other companies without being considered a subcontractor. They use a Professional Services Agreement (PSA) or Master Services Agreement (MSA) rather than a full-blown subcontract. But I suspect they are filling positions that may be internal company positions or roles on Fixed Price contracts or other contracts that do not require subcontracting consent. There are employees and subcons. Is there a third category that can be utilized in the environment I describe above?
  8. Example: CPFF Term/LOE Navy Contract which ended December 2007. Standard Navy LOE clause in contract states; "If the total level of effort specified in paragraph (a) above is not provided by the Contractor during the period of this contract, the Contracting Officer, at its sole discretion, shall either (i) reduce the fee of this contract as follows Fee Reduction = Fee (Required LOE - Expended LOE)/Required LOE or (ii) subject to the provisions of the clause of this contract entitled "LIMITATION OF COST" (FAR 52.232-20) or "LIMITATION OF COST (FACILITIES)" (FAR 52.232-21), as applicable, require the Contractor to continue to perform the work until the total number of man-hours of direct labor specified in paragraph (a) above shall have been expended, at no increase in the fee of this contract. The payment clause has allowed the billing to be % of allowable cost of each invoice. Indirect rates have been audited and now it is time for final invoice. LOE has not been met and a significant refund is due for the variance between % of cost and LOE incurred. Questions? 1) Is it up to the Contractor to automatically refund the fee billed in excess of the LOE calculation at close out or wait until the CO reduces the fee? 2) Is there any recourse penalites on the Contractor for not refunding the fee earlier at contract end when it was known the LOE was not met?
  9. The AF recently published a new guide that I am having trouble understanding. https://cs.eis.af.mil/airforcecontracting/knowledge_center/Documents/Other_Pubs/Other_Guides/cpff_loe_guide.pdf#zoom=100% It seems that the guide is in direct conflict with the FAR 16.306(a) which states that the fee is "fixed at the inception of the contract" however page 5 paragraph (h) of the guide states that the fee can be reduced if the contractor works less hours than the stated LOE. (To be clear, this is not an adjustment based on change in the work to be performed, but an adjustment based on the number of hours actually worked to achieve the LOE). According to the guide, the fee is tied directly to the actual hours incurred and gets proportionally adjusted when the contractor expenses hours which is less than the identified LOE. Additionally, the guide specifies that the Fee is paid based upon hours expended. So my question for the WIFCON community is: If the guide were utilized, how exactly would the fee be considered fixed? ------------------------------------------------------------------------ Note: I have been directed to utilize this contract type for emergency repair services as opposed to T&M. In my situation the LOE is unknown, definite goals as well as how long it will take components to be repaired are unknown, and the end products are also unknown as I cannot predict what component or product will need to be repaired. I had some creative solutions but after reading the guide, I am lost as to how a fixed fee is able to fluctuate. If the guide is accurate, my revised solution would be to set the LOE so high that it would be improbable that the contractor could ever attain it then simply be adjust the fee each period relative to actual hours expensed.
  10. Good morning, I am new to WIFCON and managing my company's first prime contract, which is CPFF for engineering products & services. We added a new subcontractor not part of the original bid, and our FFP subcontract was approved by our ACO. In our original cost proposal we bid using our G&A as a pass-through/contract administration fee, which was accepted by the government. We have now switched to a material/subcontractor handling fee for material purchases, vendors, consultants, etc. G&A is applied only to this fee instead of the whole subcontractor price, which lowers the overall amount of pass-through. We do have program management and contract administration pieces to managing the work of the subcontractor. What can I charge as a pass-through fee -- the bid G&A, the current/actual G&A, or the material/G&A mix? (or another option?) The material/G&A mix would be the lowest cost to the government. Also, if current/actual G&A should be applied, do I need to re-calculate that and re-determine pass-through for each invoice or can I determine it now and use it for the length of the subcontract? Thank you for your help! Vr, SD
  11. Invoicing CP Subcontract - CPIF task order. Standard process used to build cost plus rate (1 salaried individual, 1 hourly individual on contract) cost base calculated for both types of individuals. (salary, calculated to hourly rate based on 2080 hours for the year) or (hourly rate accordingly), OH&G&A applied (accordingly)= resultant rate, This build up was provided at bid in sanitized version to prime and un-sanitized version to govt. (approved and awarded) Client invoiced for number of hours X Resultant rate.. in a standard month, (160 hours), Salaried individual works 120 hours, hourly works 160 hours. Client returns to question why the salaried individuals rate did not fluctuate based on the number of hours worked…. (this is where I need help) I understand the concept of Uncompensated over time causing the cost base to fluctuate if a salaried person works more hours than a standard week / month. However, we do not have uncompensated over time, so I have no trouble making this calculation / adjustment.(this is not the issue) But what happens when a salaried individual works “less” than a full month? Client requesting to see rate fluctuation, but based on cost build up, if I fluctuate the “cost” (which by this situation would go up, not down) would that not be double dipping, if I’m building my cost with “salaried down time” calculated into my OH already? Why would my cost change, if I’m only invoicing for the number of hours worked at the resultant rate? Invoicing requirements stated in the contract: Subcontract number & TTO number Total Straight Time labor charges by person – hours, labor category , rate per hour, and extended amounts or Fixed unit price and quantity delivered Material costs (if any) Travel and per-diem costs (if any) itemized by TTO Other costs incurred (if any) allowable under this subcontract Total current invoice amount and Cumulative billings by TTO to date This is exactly what was provided on the invoice Isn't this why we build a negotiated rate schedule - submit and get approved, and the true up at year end with an ICE review /submit?
  12. I have a CPFF contract awarded competitively. If I submitted a cost growth proposal for over $700K (scope changes/rates/overruns). its my understanding that we would need to provide Certified Cost & Pricing Data. The proposal was submitted a while a go and when the government was ready to discuss, I updated the pricing with current G&A rates due to my belief that the change falls under TINA. At this point some of the data was actuals. Based on the new rates, its significantly higher than the original cost growth proposal. Government wants us to agree to cap the rates for the out years. My question is three-fold (1) is that ok even if our rates change during those years? (2) I thought there was some type of provision that pretty much forbids the government from forcing an agreement that could significant and detrimental impact to the health of a company, did I imagine this provision? (3) Can the government make the decision to make the award based on the previous proposal?
  13. I have a CPFF Contract that was competitively awarded. During the proposal phase some items identified in the spec as optional which others identified as required. My company won with our proposal clearly not including one of the optional specifications. During kick-off, our customer's customer strongly suggested that the optional specification we decided not to include should be included in our product. PM to PM, the decision was made to make it happen. I found out later and sent notification to the KO that this was being requested and asked for concurrence, explaining that this would be a change for which we would seek equitable adjustment. We submitted our proposal for the change...including an agreement to absorb some of the costs. However, the customer was very sensitive about us identifying this as any type of scope creep which 95% of the increase was directly related to their identification as an option as now a requirement. I have been sure in every communication to explain that this cannot be identified as cost overrun because we have not exceeded our labor hours or material costs for any of the work we proposed to do. The proposal was approve for award and now the government PM is suggesting that the contract is also modified to include language to identify percentage of funding responsibility should we "overrun the contract again". I believe he's looking for language which sets in stone a 60/40; 70/30 or better split for ANY cost growth with us taking on the majority of costs because they want to make sure that the program doesn't die on the vine due to funding concerns. I responded that the FAR already has provisions related to responsibility for cost growth and that those provisions are based on the reasons for growth. If it is a change in scope then that would be the govts responsibility but if we overrun our costs we can send notification and the government will determine if they want to fund it or not. And if not the program would end. I've not had a situation where the govt wanted us to sign up to take on responsibility for all cost growth especially when PM to PM / Eng to Eng conversations are creating the growth. After I spoke up the KO told the PM they would have the discussion off line and that growth should be handled on a case by case basis. I do expect them to come back with something. I'm just curious as to under what authority they could include such a provision and if they do, would it make sense to agree to split funding on true overruns only and up to a certain dollar amount?
  14. Many of you are asking yourselves why a company would do such a thing. I admit that it does sound very crazy and I think a contractor can go too far to please the Government customer. I would like to know whether a contractor is allowed to use their fee from their CPFF completion contract to pay for an overrun on the contract. My gut tells me that this is not allowable because the contractor would be giving free services to the Government and think this can be linked to 52.203-3 Gratuities however the "free" services (services at no charge to the Gov't) would not be given to an individual (they would benefit the whole agency). To say it a different way, the contractor wants to forego invoicing the government for a few months of services on a CPFF contract to alleviate an overrun at their own expense. The contractor would also be satisfied and would agree to having the CO move the amount on the fee CLIN to the labor CLIN. Additional information about the overrun: The overrun is primarily caused by the Government adding NEW scope to the contract. I know that the Government is obligated to pay for the additional scope costs with fee. Maybe I am thinking down the wrong path and there is a much simpler answer out there. I have done google/wifcon searches but have not seen anything out there on this specific topic. As usual, your help is very much appreciated. 52.203-3 Gratuities. As prescribed in 3.202, insert the following clause: Gratuities (Apr 1984) (a) The right of the Contractor to proceed may be terminated by written notice if, after notice and hearing, the agency head or a designee determines that the Contractor, its agent, or another representative— (1) Offered or gave a gratuity (e.g., an entertainment or gift) to an officer, official, or employee of the Government; and (2) Intended, by the gratuity, to obtain a contract or favorable treatment under a contract. ( The facts supporting this determination may be reviewed by any court having lawful jurisdiction. © If this contract is terminated under paragraph (a) of this clause, the Government is entitled— (1) To pursue the same remedies as in a breach of the contract; and (2) In addition to any other damages provided by law, to exemplary damages of not less than 3 nor more than 10 times the cost incurred by the Contractor in giving gratuities to the person concerned, as determined by the agency head or a designee. (This paragraph ©(2) is applicable only if this contract uses money appropriated to the Department of Defense.) (d) The rights and remedies of the Government provided in this clause shall not be exclusive and are in addition to any other rights and remedies provided by law or under this contract. (End of clause)
  15. We are a subcontractor. The ultimate Government client has "tripwire" rates, where if a contractor rate in a certain category is over a certain rate, it requires SES-level approval for funding. An engineer must not cost more than $130/hr for example. The prime contract is CPFF, and our subcontract is CPFF. This makes it strange because they basically take CPFF rates and roll them up like a T&M rate and compare them against this tripwire. Is there any reason we have to bid the same fee percentage on each person? We have one expensive engineer that is close to the tripwire rate. Could we bid her fee percentage lower than the other two engineers on the task? Since it is CPFF, not cost plus percentage of cost, it seems to me that this would be ok. As long as the bid makes it clear which dollar amount is cost and which is fee, it seems like we could bid the "rates" however we want, understanding their cost is their cost and that cannot be changed for the bid. Please let me know if you see any issues with this approach.
  16. I am the owner of a small woman-owned HubZone company... and new to the forum ... We currently have an IDIQ base contract w/reqirements placed via task orders for (2) CPFF tasks and (1) CPFF completion type task. All the tasks are based upon proposed rates by labor category and represented in an hourly dollar amount. My question is what is the proper way to calculate the hours and appropriate cost for a salaried exempt employee who may work more than 40 hours in a week? For example a proposed labor category of Sr Computer Engineer at $40 per hour based upon 40 hrs a week ...if that employee works 60 hrs in a week the gross wages are $1600. Should the task be billed for 60 hour or 40 hours? should the task be charged at the $40 rate or is it the gross wages divided by the # of hours in essence reducing that $40 rate? Also, what if the employees actual is only $1520 ... is the billed amount at the proposed rate of $40 or is it once again the actual grosss wges divided by the number of hours actually worked? Someone please help clarify ... I apologize in advance for what seems like a very simple Contracting 101 type question, but a recent COR change has us now second guessing ourselves and past procedures...