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cscm2012

Transition Out costs

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We have a  BPA that is expiring and the work has been awarded to another vendor,  it is a Service Contract.  The question we are trying to get resolved is what are acceptable and reasonable Transition/Phase Out costs.  We have been doing this work for over a decade and have facilities we have to shut down and vehicles we have to sell.   My company is presenting to the government transition out costs that include severance packages for the overhead staff that are not required to be offered employment by the new contractor (severance package is less than what the company normally provides), location close out costs (remaining lease amount on facilities and moving out costs), and balance remaining on vehicles that were purchased for this work and approved by the client for purchase.  I have not been involved in a Transition of this size for a service contract and was wondering if the government will see these type of costs as reasonable.   Thanks for any input.

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So for your BPA that you had has the Government told you that you are entitled to Transition/Phase Out costs? 

If so under what clause authority have they indicated you are entitled to such costs?

 

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I will echo Mr. Culham's comment -- if you are entitled to transition/phase-out costs, a clause in the BPA will explain the entitlement that you and the Government agreed to when the BPA was established. 

But don't look for a termination for convenience clause in the BPA -- that clause will avail you nothing because your situation is not a termination.

Please let us know what you find.

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2 hours ago, cscm2012 said:

We have a  BPA that is expiring and the work has been awarded to another vendor,  it is a Service Contract.  The question we are trying to get resolved is what are acceptable and reasonable Transition/Phase Out costs.  We have been doing this work for over a decade and have facilities we have to shut down and vehicles we have to sell.

You don't address whether your proposed transition costs are direct reimbursable or indirect. That distinction matters.

The fact that you have to lay off staff and close facilities and break leases and sell vehicles is really not particularly relevant to the contract at hand. I would expect you to have better luck claiming them as allowable indirect costs and passing them back to your customers via your indirect rates.

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