Rental Car Expenses Incurred Outside Task Orde PoP

[Leslie]

Hi Everyone- My question relates to rental car expenses where the agreement was established within the PoP but some costs incurred beyond the PoP expiration as well. I have 9 guys on the road 365 days out of the year. Our last task order expired 8/27/13 and the current follow on task order 8/26/14. Their rental cars are billed monthly resulting in a few outstanding bills for cost incurred 8/16-9/16. Internally, I can split the costs between the expired task order and the follow task order which was my first instinct. Could I charge the entire invoice to the expired task since the rental car agreement was in place within the PoP; or should I charge the 8/16 - 8/27 cost incurred to the expired task order and the 8/28 - 9/16 to the follow on task order? Thank you!

[here_2_help]

Leslie, I would think that splitting the costs between task orders would be a reasonable thing to do. But then again, I don't have your task orders or the contract in front of me either.

Hope this helps.

[Leslie]

Zombie, Thank you! Is there any information on our contract that I can provide you with that could help you make a determination?

[here_2_help]

Leslie,

You don't know me. I could be a teenage goth death metal headbanger, for all you know. You don't know if I know what I'm talking about, or not. So you can't trust anything I tell you.

What you need to do is to get yourself a legal opinion or an opinion from your contracts folks. If that's not feasible, consider hiring an outside consultant. You can use Google to find a local one.

Best of luck!

[Leslie]

Sir, You're right- I don't know if you are a teenage goth death metal headbanger, but I do know that you are quite rude. You implied that you didn't have enough information to provide an adequate answer. I've been in this business a long enough to know what information I can release without jeopardizing the performance of this contract. I never take anyone at their word, especially someone who doesn't provide a reference or data source.

[here_2_help]

I apologize if you found my response to be rude, Leslie.

Best wishes!

[Retreadfed]

Leslie, you did not tell us a lot of facts that could be useful in attempting to point you in the right direction such as if your task orders are cost reimbursement, fixed price, etc. Also, you did not say if the rental costs are charged directly to the task orders or are charged as an indirect cost. If they are charged direct, do the cost principles apply or is the cost included in a lump sum CLIN? Are the people who use them on TDY? Is your company leasing them or do employees rent them and are then reimbursed for the rental expenses? Does the contract have any special provisions regarding rental cars? Is your contract subject to the CAS?

[Leslie]

Hi there! The contract is small business Sole Source Cost Plus exempt from CAS. I have a base year and 2 options each funded with a single CLIN. The rental cars are a direct charge; however, initially they are billed to a company credit card and then charged back to the task order when the credit card statement is reconciled. The people using the rental cars are in TDY status and per the contract we have authorization to rent the cars. Does that help? The simplest solution is to split the cost between the task orders, but since the need and the agreement exist during the period of performance I would like to think I can charge the entire bill to the task order that expired in August. Thoughts?

[Retreadfed]

From what you have provided, I think you need to consider the allocation cost principle, FAR 31.201-4. Note that costs have to be allocated to cost objectives such as your task orders on the basis of benefits received or another equitable basis. Based on my experience with government auditors, they would likely not accept the entire rental expense being allocated to a single task order, but would say it has to be allocated over all benefited task orders. You may be able to convince them otherwise. In any event, whatever allocation method you use, you will have to show that it is compliant with 31.201-4.

[Leslie]

Thank you

[joel hoffman]

Leslie, I agree with Retreadfed. I was in the woods this week or would have posted that the cost principles Retread cited require the costs to be properly allocated to the contracts, consistent with the benefits and usage of the rental cars provided under each task or contract. The funding under each task is meant to be used for expenses necessary to support those activities.

It really isn't different than the concept of charging a whole month of rental for transportation to an expiring government contract, then using the vehicles for the rest of the month on another, non-government contract.

Hope this illustrates the allocability concept that Retread described, as it applies to your situation.