Jump to content
The Wifcon Forums and Blogs

Recommended Posts

Is DOD allowed to fund contractor training with appropirated funds as required by the contract for them to stay up to date with changes to commercial software used in the contract?

I researched FAR Part 31, and both appendences for allowable costs, but I was not able to get a definite answer. The broad answer was if it's required by the contract we can fund the training.

Share this post


Link to post
Share on other sites
Is DOD allowed to fund contractor training with appropirated funds as required by the contract for them to stay up to date with changes to commercial software used in the contract?

I researched FAR Part 31, and both appendences for allowable costs, but I was not able to get a definite answer. The broad answer was if it's required by the contract we can fund the training.

What type of contract pricing is involved? You didn't provide any background or explain what if anything the contract says about employee training. You hinted that this is not initial training to qualify someone to perform the contract but that isn't clear.

If cost reimbursement, what is the contractor's normal accounting practice? Does it charge employee training as a direct or indirect cost? I assume that reasonable, ordinary training costs to maintain expertise to perform required contract activities would probably be allowable, consistent with the contractor's accounting system, but may be wrong.

If this is a T&M or labor hour contract, it may depend upon the wording in the contract. But shouldn't training to qualify the person to perform a required task at the agreed contract hourly rate already be included in the hourly rate? I would tend to argue that it should. The employee is supposed to be qualified, so the contractor should provide trained workers to do the assigned tasks. You aren't required to directly expend contract labor hours to train them are you?

Even our government employees training costs are built in to the overhead rates applied to determine our effective hourly rates that we charge for reimbursable work. Our customers should not have to pay direct hours for our training.

Share this post


Link to post
Share on other sites
Is DOD allowed to fund contractor training with appropirated funds as required by the contract for them to stay up to date with changes to commercial software used in the contract?

What does "fund contractor training" mean? Does it mean issuing a purchase order to a training provider to pay for attendance at training by contractor employees, or does it mean reimbursing the contractor for cost that it incurred to train its personnel?

Share this post


Link to post
Share on other sites

Agree with Joel. Where I work, our practice is to charge only contract-specific training to a contract, whether reimbursable or FFP (FFP would be an internal accounting exercise, but that's how we charge), and it has to be very specifically required by this particular contract. Training, for example, in Microsoft Office, or Primavera, etc. would be charged to overhead.

Share this post


Link to post
Share on other sites
Agree with Joel. Where I work, our practice is to charge only contract-specific training to a contract, whether reimbursable or FFP (FFP would be an internal accounting exercise, but that's how we charge), and it has to be very specifically required by this particular contract. Training, for example, in Microsoft Office, or Primavera, etc. would be charged to overhead.

Cajuncharlie,

You say you "agree with Joel" but it's not clear to me which part of his response you're agreeing with.

Next you describe your cost accounting practice "where I work" but, as you are not performing the contract, I would assert your practice(s) are irrelevant. What matters are the disclosed or established practices for the contractor that is performing the work.

In any case, I agree with both Joel and Vern that more information is needed. The question is essentially unanswerable as posted.

Hope this helps.

Share this post


Link to post
Share on other sites
Is DOD allowed to fund contractor training with appropirated funds as required by the contract for them to stay up to date with changes to commercial software used in the contract?

I researched FAR Part 31, and both appendences for allowable costs, but I was not able to get a definite answer. The broad answer was if it's required by the contract we can fund the training.

I humbly submit that the part in bold may be a point that has been missed. Is it "required by the contract" that DOD fund it or is it required by the contract that they stay up to date? What does the ODC's section in the terms and conditions of the contract say?

Share this post


Link to post
Share on other sites
I humbly submit that the part in bold may be a point that has been missed. Is it "required by the contract" that DOD fund it or is it required by the contract that they stay up to date? What does the ODC's section in the terms and conditions of the contract say?

As stated above, there isn't enough information to answer the question and ferreirra doesn't appear to be interested in providing any more clarification.

There is a lesson learned here for those who write contracts, those who evaluate or negotiate price or cost and to all contracting personnel. . If you are going to put specific requirements in the statement of work such as employee training or continuing education for proficiency, you need to identify how you intend to pay for it and/or determine how the contractor will charge you for it - before awarding the contract. Do not wonder how it can or should be charged to the contract after award.

How can you even evaluate the proposed cost or price or compare proposals if it isn't clear to all parties?

ferreirra's office should have spelled out ot determined how to pay for the training it apparently requires of contractor personnel.

Share this post


Link to post
Share on other sites
Cajuncharlie,

You say you "agree with Joel" but it's not clear to me which part of his response you're agreeing with.

Next you describe your cost accounting practice "where I work" but, as you are not performing the contract, I would assert your practice(s) are irrelevant. What matters are the disclosed or established practices for the contractor that is performing the work.

In any case, I agree with both Joel and Vern that more information is needed. The question is essentially unanswerable as posted.

Hope this helps.

I will probably continue to provide "irrelevant" information on the theory that sharing information in response to a muddled queston is better than stepping back and telling somebody there is not enough information to provide a meaningful answer.

In this case, it was a principle that has been accepted by government reviewers, so at least there would be something to go by.

Also please note my continuing advice to RTFC (read the f-f-f-full contract) and reminders that I'm a four corners of the contract kind of guy, which in hindsight I might have repeated here, although that was covered by agreeing with Joel (all of his post, since no exceptions were mentioned).

Share this post


Link to post
Share on other sites
I will probably continue to provide "irrelevant" information on the theory that sharing information in response to a muddled queston is better than stepping back and telling somebody there is not enough information to provide a meaningful answer.

In this case, it was a principle that has been accepted by government reviewers, so at least there would be something to go by.

Cajuncharlie,

My intent in responding to you the way I did was not to try to make you wrong, but to make the point -- a point I think is critical -- that very few contractors are the same. What one does has no bearing on what another does. In this case, I would add that what a government agency does as far as its own practices has little if any bearing on what is acceptable for contractors to do.

(I'm assuming, of course, that the question turns on whether the contractor normally charges employee training as a direct contract cost. That may not be the crux of the situation, but I had to start somewhere.)

I will continue to take every opportunity to emphasize that comparing two contractors' cost accounting practices (or comparing governmental practices to contractor practices) is a false comparison that will not lead to the correct answer.

H2H

Share this post


Link to post
Share on other sites

The general rule I used for negotiations is training to stay current with software that should be in the contractors normal skillset isn't paid for by the government. However training to stay current with a specialized package or a package the government requires that isn't common in the marketplace is reimbursable.

Share this post


Link to post
Share on other sites
The general rule I used for negotiations is training to stay current with software that should be in the contractors normal skillset isn't paid for by the government. However training to stay current with a specialized package or a package the government requires that isn't common in the marketplace is reimbursable.

I don't think it is correct to say that the gov't "won't pay for training" to stay current with software. If the firm includes such training in some type of overhead or other indirect cost, you will be paying for it. Then if you pay direct hours for certain specific training, those hours may include the training overhead markup too. So it is important to understand how the firms charge for training.

Share this post


Link to post
Share on other sites

Joel,

You're correct. I should have said we don't pay direct hours for that kind of training. That is an expecetd part of overhead or some other indirect cost.

The important thing is both parties understand and agree before the contract is signed.

Share this post


Link to post
Share on other sites
Guest
This topic is now closed to further replies.

×