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Two wholly owned subsidiaries will be partnering for work to be rendered to the US Government under a CPFF contract. Both Business Units have their won DCAA approved Indirect rates. Company B will invoice Company A for all Direct Costs plus their Indirect burdens plus their fees. Company A, which owns the contract, will produce its own invoice charging all its costs plus Indirect and their fee.

Is Company A allowed to apply a Fee, call it a Handling Fee,  to the invoice received from Company B?

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Is it contemplated that A will issue a subcontract to B? If so, are handling fees consistent with A's CAS Disclosure Statement or practice? If not contemplating a subcontract, does A contemplate handling the transaction as an inter-organizational agreement, and if so, why?

 

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21 hours ago, Luigi D'Amato said:

Is Company A allowed to apply a Fee, call it a Handling Fee,  to the invoice received from Company B?

If Company B is providing a comercial item and its consistent practice has been to sell that item at price and that price is not unreasonable, then yes.

Otherwise, no.

See 31.205-26(e).

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21 hours ago, Luigi D'Amato said:

Is Company A allowed to apply a Fee, call it a Handling Fee,  to the invoice received from Company B?

Have you considered the impact FAR 31.205-26(e) may have on this issue?

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