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If a company is CAS covered and maintains a Disclosure Statement and additionally has DCAA Provisional Rates, are they required to use these rates in developing a proposal for a Fixed Price Non-Commercial Competitively Awarded Contract. It's my understanding that FFP Competitive Proposals are exempt from CAS; so are they also exempt from using these rates.

What happens if its a T&M contract or FFP LOE type competitive proposal.

Thank You

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What Retreadfed said.

As far as I'm aware, there is no requirement -- none -- that requires a contractor to use any particular indirect rate for developing a cost estimate. TINA is a disclosure requirement, not a use requirement. CAS doesn't address any particular rate, it addresses cost accounting practices.

H2H

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Thanks

Quote"

"Why do you think that billing rates would have to be used in pricing a fixed price or T&M contract, whether CAS covered or not? "

I guess I should have said Forward Pricing Rates. I know companies have estimating manuals and these get reviewed by DCAA. So if I'm a company bidding or proposing on a competitive non commercial FFP solicitation, I am not bound by an FPRR or FPRA since the awarded contract will not be subject to CAS.

Thank You

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DOECPA,

A company need not use its executed FPRA rates. A company need not use its FPRR rates--ever--since that's the government's "recommended" position.

When a company knows its projected rates will significantly deviate from the FPRA rates, it would be subject to a TINA violation ("defective pricing") if it were to use its FPRA rates without disclosing that it knew its FPRA rates were no longer valid.

What I'm trying to say is that a company is not bound by an FPRR or FPRA set of rates, regardless of whether or not the awarded contract will be subject to CAS.

Hope this helps.

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  • 2 months later...

Most FPRAs written today require both parties to use the FPRA for all Govt pricing actions...

Until the FPRA is terminated by either party.

DCAA recommended provisional billing or pricing rates do not have any bilateral execution..

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Gnatman,

You must see more FPRAs than I do. I haven't seen one in a decade, since by the time DCAA finishes its GAGAS-compliant audit, and the ACO gets approval of its PNO/PNM, and then negotiates, and then gets approval for its Memo of Negotiations, the contractor has, without exception, resubmitted its Forward Pricing Rate Proposal and whatever the previous FPRA rates would have been are now OBE and mooted.

In my experience with large and small contractors, nobody EVER terminates a FPRA, since they self-terminate before execution.

H2H

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Gnatman,

You must see more FPRAs than I do. I haven't seen one in a decade, since by the time DCAA finishes its GAGAS-compliant audit, and the ACO gets approval of its PNO/PNM, and then negotiates, and then gets approval for its Memo of Negotiations, the contractor has, without exception, resubmitted its Forward Pricing Rate Proposal and whatever the previous FPRA rates would have been are now OBE and mooted.

In my experience with large and small contractors, nobody EVER terminates a FPRA, since they self-terminate before execution.

H2H

There are FPRAs in place, even with the big companies. They're just not on the bigger rates, but more of Direct Labor, Escalation, and CERs. I have not seen an FPRA on Overhead, G&A, Fringe, etc. for a bigger contractor because the FPRPs are so frequently updated that by the time there is a full audit completed on the FPRP submission the contractor is already preparing the next.

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  • 8 months later...

Good Morning,

Are large contractors with approved estimating systems required to propose their estimated indirect rates (No FPRA) when proposing on large (> 700K) competitive cost reimbursement type contracts? Thank You

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DOECPA,

No.

TINA requires SUBMISSION of either certified or non-certified cost or pricing data, or perhaps information other than cost or pricing data, which I believe would reasonably include the contractor's latest estimate regarding its current and forecasted indirect cost rates. However, TINA does not require a contractor to USE its most current estimated forward pricing rates in its proposals.

But with respect to your question, if the proposal is "competitive" then TINA wouldn't apply.

If I haven't answered your question, would you please clarify what you're looking for?

Hope this helps.

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DOECPA,

If you are asking if the Govt. would just accept the indirect rates without performing an analysis, then the answer is no. A cost realism analysis includes an analysis of both direct and indirect costs. In my opinion, the fact that the contractor has an approved estimating system would affect the extent of the analysis required, but it would not be enough to accept proposed indirect rates no questions asked.

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