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I am currently a CPFF subcontractor under a Government prime contract. My company cycles on a calendar year and each January we update our provisional indirect rates for the upcoming year as well as calculate our final rates for the previous year. These rates are then provided to DCAA for review/approval and used for billing purposes under any CR contracts. This year, DCAA has stated that since we do not have a CPFF or T&M prime contract ourselves, we do not have a requirement to submit our PBR and they will NOT review our 2017 provisional rates. Our Prime contractor will not accept our updated rates for the CPFF subcontract since we do not have approved rates. As a small business, if we continue to bill using the provisional rates of 2016 (which were approved), we will be operating at a loss for 2017. In accordance with FAR 42.704 (c), billing rates may be prospectively or retroactively revised by mutual agreement between DCAA and the contractor. Without DCAA agreement, how is a subcontractor able to invoice for rate adjustments?