Contract Type vs Contract Management and Audits

[Bucks12]

There is a DoD prime contract that is categorized as FFP LOE. However, they are buying specific Lab Cats, at specific rates, for specific hours (I might add the value of the prime K is $5M). The invoicing is monthly with lab cats/hours/rates being itemized in the invoice. For whatever reason, this office is not permitted to enter into T&M contracts. By calling it FFP LOE, I guess they are skirting this prohibition. Anyway, the prime has flowed down all of the T&C's to my company in a subcontract with all the same proposal requirements/invoicing instructions.

My question is, if DCAA/DCMA were to audit my companies contracts, is this going to cause an issue?

[Retreadfed]

What kind of audit do you think they can do that you are worried about?

[Bucks12]

CPSR. Don't know much about the scope of a CPSR, so maybe I'm worrying about nothing.

[here_2_help]

Bucks12,

If your only DOD contract is a FFP LOE subcontract that's worth less than $5 million, I would not be worried about a CPSR in your near-term future.

On the other hand, if the value of your proposal is more than $700,000, it may be subject to the Truth-in-Negotiations Act (TINA), which could subject you to stringent proposal format requirements and certification of "cost or pricing data" (and the associated risk of "defective pricing"). On the other hand, DCAA pretty much skips looking at FFP proposals valued at less than $10 million these days, so unless there is some suspicion of wrong-doing, I wouldn't sweat it too much.

Hope this helps.

[Bucks12]

Thanks, here_. TINA was another consideration, but wasn't too concerned about that.