Contractor Telework - Billing Rates

[Don Mansfield]

2 hours ago, here_2_help said:

Don, I find myself in the position of once again disagreeing with your advice. Unless the contracting officer with cognizance over this contract is also the same contracting officer with cognizance over the contractor's final billing rate proposal and negotiation of final billing rates (see 42.705-1), I don't believe they have authority under 42.704 to issue a unilateral indirect rate determination. I base my position on the language at 42.704(a).

I agree that whoever has the authority to revise the billing rates in @TylerACC's agency should be the one to revise the billing rates, if necessary. However, I don't think it should be done unilaterally unless the parties cannot negotiate an agreement.

2 hours ago, here_2_help said:

I note that the original poster used the term "telework" which seems ambiguous. Does telework mean the contractor's employees are working from their own homes, or does it mean they are working from their offices at the contractor's facilities? I don't know. I also don't know whether the contractor is maintaining office space for its employees since they are not working at the government's facilities. That is a key unknown fact. If the contractor maintains office space for its employees then it would be reasonable and appropriate for it to bill the contract at higher indirect rates that include its facilities costs.

I don't think @TylerACC would be asking the question if the contractor's employees were teleworking from the contractor's facilities. Maybe @TylerACC can straighten me out if I'm wrong.

2 hours ago, here_2_help said:

To me, this issue should have been raised and addressed by the parties back in 2020, when the contractor began teleworking routinely. Now, here we are, two or three years later, trying to fix something that I'm not even sure is a problem.

Yep.

2 hours ago, here_2_help said:

The contract appears to be silent regarding the ratio of onsite and offsite work -- though the parties must have had a notion as to what that ratio was when they negotiated the contract's estimated cost. At this point, given the facts presented, I don't see a way for the contracting officer to force the contractor to change its billing rates. What's likely to happen is that the contractor will burn through its funding quicker than the parties intended ... and the contracting officer will then have leverage to force a change in contract terms (i.e., a third billing rate for teleworking employees) as a condition of either providing more funding or exercising the next Option Year. There will also be an opportunity in the CPARS rating to make any displeasure known.

...or the parties could act now to avoid this situation, if necessary.

[joel hoffman]

On 1/5/2023 at 1:37 AM, Don Mansfield said:

I'm assuming that the Government authorized the telework and that you are referring to a cost-reimbursement contract.

Tyler, to clarify, is this what you were referring to below?

16 hours ago, TylerACC said:

Don's statement earlier is true.

 

[Retreadfed]

From FAR 52.243-2 ALT I "The Contracting Officer may at any time, by written order, and without notice to the sureties, if any, make changes within the general scope of this contract in any one or more of the following:

(1) Description of services to be performed.

(2) Time of performance (i.e., hours of the day, days of the week, etc.).

(3) Place of performance of the services.

We do not know what transpired between the contractor and government when COVID happened and the contractor employees working at the government site began "teleworking."  However, it is possible that a change order occurred, the terms of which we have not been told. 

As for indirect cost rates, I assume that the "teleworking" started in 2020.  Rates for that year should have been settled by now and the contractor should have submitted its 2021 proposal already.