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Today is the first I have heard of this, where a COR removed G&A from Travel on a recent bid.  We were told there was a new FAR clause which prohibits the application of G&A on travel, reimbursable or otherwise.

Certain DoD customers have been trying to do this for a few years now, and because there was no FAR to prevent it, contractors could charge G&A on Travel unless there was language in the contract to prevent it.  And it sorta hacks me off too, because nothing creates more administrative hassle than travel advances, expense reports, JTRs, etc.  For the last few years, when I've run into this, I've recommended adding about 1/2 point to the Fee to compensate.

What about this "new" FAR clause?  Is it for real?  How long has it been around?

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No such critter

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The COR might be on to something.  GSA schedule contracts have a clause treating travel as a direct reimbursable, with no mark-ups such as for G&A.  If another contract includes the clause at FAR 52.212-4 with its Alt. I, no indirect costs are reimbursable unless explicitly allowed in the full-in for the Alt. I.

But yes, ask for the citation.  

What does “removed . . . from a bid” mean?  Are you still pre-award?

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3 hours ago, ji20874 said:

The COR might be on to something.  GSA schedule contracts have a clause treating travel as a direct reimbursable, with no mark-ups such as for G&A.  If another contract includes the clause at FAR 52.212-4 with its Alt. I, no indirect costs are reimbursable unless explicitly allowed in the full-in for the Alt. I.

But yes, ask for the citation.  

What does “removed . . . from a bid” mean?  Are you still pre-award?

"removed from a bid" simply means during negotiation, the COR subtracted G&A which had been applied to travel.

I've read FAR52.212-4 Alt I, but could find nothing about disallowing indirect costs.

Thanks for the discussion.

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Re-read Alt. I, if it is in your contract — you will see that indirect costs (G&A is an indirect cost) is payable on Other Direct Costs (travel is an ODC) only to the extent expressly allowed by one of the fill-ins — if the fill-in is blank, it is read as “none.” 

If the COR subtracted the G&A travel for his or her negotiation position, you could have added it back in for yours.  The parties have to agree for a contract to be formed.  

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It's grimly amusing to me that a government representative would take a negotiating position to deny reasonable, allowable, and allocable indirect costs. Is this really an acceptable tactic?

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8 hours ago, ji20874 said:

Re-read Alt. I, if it is in your contract — you will see that indirect costs (G&A is an indirect cost) is payable on Other Direct Costs (travel is an ODC) only to the extent expressly allowed by one of the fill-ins — if the fill-in is blank, it is read as “none.” 

If the COR subtracted the G&A travel for his or her negotiation position, you could have added it back in for yours.  The parties have to agree for a contract to be formed.  

Not sure of the circumstances here. If you are negotiating a contract,, you can certainly negotiate the terms of the clause.

If an existing  GSA schedule contract disallows G&A on travel, then it isn’t allowed. 

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On ‎7‎/‎23‎/‎2019 at 10:02 PM, ji20874 said:

indirect costs (G&A is an indirect cost) is payable on Other Direct Costs (travel is an ODC) only to the extent expressly allowed by one of the fill-ins

A little explanation off Alt I might help.  This clause is only used in T&M contracts for commercial items.  One of the concepts of contracting for commercial items is that the costs incurred by the contractor will not be subject to audit.  As a consequence, when the FAR was being amended to provide for the use of T&M contracts to acquire commercial items, one issue that had to be addressed was indirect costs on material (travel is treated as material under this clause).  Recognizing that indirect costs are part of the total cost of performance, and not wanting to subject such costs to audit to determine actual cost, the government determined to allow the parties to negotiate a lump sum amount of indirect costs that the contractor could recover.  This lump sum includes overhead and G&A but does not make a distinction between the two.

As for the GSA clause, GSA stated that it would not be applicable to orders that were subject to 52.212-4 Alt I.  If it was, it could create a conflict between the two clauses.  However, the last I checked, which was some time ago, GSA had not accomplished this.

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 Thanks for the information, Retreadfed. In my response to another post above, I was trying to be diplomatic. 

A Government employee should not be advising contractors to include costs in their proposal that are expressly unallowable. 

There is a difference between deliberately insisting upon an unallowable cost and attempting to negotiate the terms of the contract to allow it. If the term is negotiable, that fine. If it isn’t, then the government negotiator should explain that and not jack up his/her overall settlement position to reach agreement.

The cost principles are just that - “principles”. 

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3 hours ago, joel hoffman said:

The cost principles are just that - “principles

However, the cost principles do not apply to the acquisition of commercial items. 

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