Local Clause for WAWF

[Don Mansfield]

I'm looking for feedback from contractors on a contracting office's newly drafted local clause. The local clause is used in cost-reimbursement contracts that contain DFARS 252.232-7006, Wide Area WorkFlow Payment Instructions, and it supplements that clause. Contractors doing business with this contracting office are complaining that the administrative burden goes way beyond DFARS 252.232-7006 and their complaints sound valid. And, no, the contracting office did not comply with the Paperwork Reduction Act prior to using the clause, probably because it didn't occur to them. Anyway, take a look and let me know your thoughts:

SUPPLEMENTAL WIDE AREA WORKFLOW PAYMENT INSTRUCTIONS

(a) The following Wide Area WorkFlow (WAWF) payment instructions supplement DFARS Clause 252.232-7006.

( b ) Interim Voucher costs are to be broken down in a clear and logical manner, and presented consistent with the way the contractors proposal was structured. Cost information shall include identification of: 1) all labor categories utilized during the billing period; 2) number of hours and unburdened hourly labor rates per category; 3) indirect rates for each labor category; 4) material (consumable and non-consumables) purchase description and amount; 5) travel costs itemized by cost element, date and person; 6) other indirect costs not already included in #3;

7) other direct costs not separately identified; e.g., reproduction, cell phones, equipment rentals, etc.; 8) subcontractor costs itemized with the same level of detail. Subcontractor data shall be delivered directly to the COR; 9) Fully burdened hourly labor rates inclusive of fee; and 10) Average actual hourly labor rates (total actual fully burdened labor cost/total # hrs performed). Attachments created with any Microsoft Office product or Adobe (.pdf files) are to be attached to the invoice in WAWF. The total size limit for files per invoice in WAWF is 5 megabytes. If Requested by the COR, cost back-up documentation (such as delivery receipts, labor hours & material/travel costs etc.) shall be provided to the Government.

( c ) Contractors approved by DCAA for direct billing will not process vouchers through DCAA, but will submit directly to DFAS. Vendors MUST still provide a copy of the invoice and any applicable cost back-up documentation supporting payment to the Acceptor/Contracting Officer's Representative (COR) if applicable. Additionally, a copy of the invoice(s) and attachment(s) at time of submission in WAWF shall also be provided to each point of contact identified in section (g) of DFARS clause 252.232-7006 by email. If the invoice and/or receiving report are delivered in the email as an attachment it must be provided as an Adobe (.pdf file), Microsoft Office product or other mutually agreed upon form between the Contracting Officer and vendor.

(d) A separate invoice will be prepared no more frequently than for every two weeks. Do not combine the payment claims for services provided under this contract.

(End of instructions)

[here_2_help]

Don,

Yes, this would be a significant burden for many, if not most, contractors.

Here are some thoughts off the top of my head--

( says the vouchers must be presented in a manner consistent with how the costs were proposed, but then it goes on (in great detail) to define exactly how the vouchers must be presented. So which is it?

Is this a solicitation provision or a contract clause? The COR appears to be trying to do DCAA's job. Which is fine, in theory. But this is definitely overkill. I had a Navy customer, back in the 90's, who wanted similar detail. We pointed out that the requirements were not described in the solicitation, and successfully obtained a change order for nearly a million dollars, which is what it cost us to comply with the local billing requirements. This clause very much reminds me of my old Navy customer.

I am wryly amused by the requirement to attach backup to the WAWF invoice, but the backup must be limited to 5 megs or less. That may be an impossible requirement to meet; it is certainly impractical.

Back to my old Navy customer. We prepared a montly invoice to the specifications. Each month, we had a rent a U-Haul truck to deliver the invoice to the customer--it was that huge. The customer had two civilians who had full time jobs reviewing our monthly invoice. At the end of the month, we would meet with them to receive their findings, which typically consisted of deciding which costs they didn't like and would not authorize for payment. (Example: Navy will not pay 75 cent bridge toll. Contractor should have planned trip so as to avoid toll.)

This is a really bad idea, especially in light of the Obama Executive Order on excessive regulatory burdens. But if that's the game the local contracting office wants to play in this time of budget pressure, then I as the contractor would follow the direction given ... and hit the CO with a change order REA. I would also consider filing a claim for delay & disruption, if the REA wasn't agreed-to.

** Shakes head **

Please tell me this isn't SWDIVNAVFACENGCOM. I would have thought they would have learned their lessons 15 years ago.

This clause is NOT going to be helpful.

[Don Mansfield]

here_2_help,

No, this isn't SWDIVNAVFACENGCOM, but you're not far off (geographically). Thanks for the reply.

-Don

[pmh]

^{We just had the exact same supplement added to the WAWF clause in our contract. Don, what was your resolution to this problem?}

[dcarver]

pmh - don't sign the modification? Reporting to that level surely will increase the costs it takes you to compile your monthly billing and you should ask to adjust the contract price accordingly. Or submit an REA requesting the contract price be adjusted to accomodate the local clause.

[pmh]

Thanks dcarver, they actually issued the modification unilaterally. I'm looking into the REA now.

[Don Mansfield]

^{We just had the exact same supplement added to the WAWF clause in our contract. Don, what was your resolution to this problem?}

pmh,

It wasn't my problem to resolve. Most contractors accepted the new clause with some fuss. I only know of one that did not sign the modification.

What caught my attention was how this contracting office, like many, was imposing a significant administrative burden on contractors without any consideration for the rulemaking process. There are a lot of local clauses out there that are used without regard for the requirements of the OFPP Act and the Paperwork Reduction Act.

[Daniel Chalfant]

Don,

Thank you for pointing out the contractor burdens associated with this local clause. It is a tremendous burden to the contractor and the subcontractor. Since subcontractors do not provide proprietary data to the prime contractor, for a CPFF sub, it required TWO Invoices each month. One invoice is sanitized for the prime, the Second invoice includes the required detail for the COR. The Sub must submit their invoices directly to the COR, who has no privy of contract.

At Accenture, we tried to solve this problem by using Time & Material subcontracts. A T&M invoice meets both requirements and the second invoice can be a copy of the first. The CO however, refused to provide consent for T&M subcontracts. The only viable solution seem to be to pass the additional cost of this clause on to the government.

[policyguy]

I do not believe that DCAA allows direct submission of vouchers to the payment office if the contractor has an approved billing system. I believe this was changed several years ago - - see DFARS 242.803. If this is the case then paragraph © is in error.

[Retreadfed]

I think you are referring to DFARS 242.803( B )(1)(C ). If that is the correct paragraph, it is not incorrect. DCAA has approval authority for interim vouchers under cost reimbursement and T&M/LH contracts. With DCAA approval, contractors can submit interim vouchers directly to the paying office. Because DCAA does not have approval authority for final vouchers, DCAA cannot grant direct billing for final vouchers.

[here_2_help]

Retreadfed,

Actually only small businesses retained direct bill authority. If you go to the DCAA website and check out the recent MRDs, you'll see what I mean. Ping me if you don't see it.

The point I tried to make so long ago is that the local clause imposes a structure that may or may not be consistent with how the contractor accounts for costs. For example, the focus on "labor categories" in a cost-reimbursement contract is an interesting concept, since "direct labor" is what gets burdened, not the labor categories. That is but one issue I take with the clause. The issues are such that I might be tempted to claim it was an unauthorized deviation, if I were so inclined.

I get it. The COR needs the visibility. But to obtain the visibility a significant administrative burden is being added. That burden has a cost, regardless of whether the CO sees it or not.

H2H