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tjsmith57

Request for Equitable Adjustments

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I m working a Request for Equitable Adjustment with the . . .  and we have included the costs for a consultant who supported us with this and his associated costs. The government has now come back and asked for copies of our request for approval and the subsequent COs actual approval. I have done some research and see where consultant costs are allowable under a termination settlement proposal but not a REA. Any assistance on this will be greatly appreciated. I need to be able to cite a reference or FAR provisions which shows that a consultant's costs for a REA are allowable

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 I need to be able to cite a reference or FAR provisions which shows that a consultant's costs for a REA are allowable.

 

Cite FAR 31.205-33, Professional and consultant services costs.

If you have not stated the REA in the form of a claim (see the definition of "claim" in FAR 2.101), and if the contract does not expressly require CO advance approval of consulting costs, then the U.S. Court of Appeals for the Federal Circuit has ruled that the cost of a consultant to assist the contractor in REA preparation is an allowable cost of contract administration. See Bill Strong Enterprises, Inc. v. Shannon, 49 F.3d 1541 (Fed. Cir. 1995). However, the amount paid to the consultant must be reasonable and the use of a consultant must meet the tests in FAR 31.205-33(c)See also Nash & Feldman, Government Contract Changes 3d ed., § 16:34:

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The prevailing case law view of FAR 31.205-33, Professional and consultant service costs, which includes legal fees, is that recovery is generally granted for services that were specifically tied to a particular request for an equitable adjustment or negotiations, and which efforts benefited the contractual purpose. Thus, consultant effort should promote contract administration in a way that benefits both the Government and the contractor, which will be lacking where the consultant promotes Government/contractor hostility and poorer relations. The costs also must be reasonable in relation to the services rendered and not contingent on costs recovered from the Government. They will also be recoverable even if negotiations fail and litigation ensues...

A number of cases have found that the cost of activity of the contractor before the filing of a formal claim under the Contract Disputes Act was allowable because it furthered negotiations.

See also Manos, Government Contract Costs and Pricing, June 2016 update, § 40.1 et seq.

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As Vern noted -- but I will emphasize -- the strength of the government's position is based on two main pillars: (1) where did you charge the costs of the consultant, and (2) did your submission meet the definition of a claim?

Hope this helps.

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