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What does this community consider to be a reasonable time after the POP expires for a company who is fully or modified CAS compliant to have billed all Direct Costs on a cost-plus contract? Please note I am not talking about receiving rate adjustment invoices - just when I should reasonably be able to expect confirmation that all direct costs have been billed. Am I crazy to think that 8 months after POP is too long when no subcontractor labor was involved (actually I think that's too long even when subcontractor labor is involved)

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What does this community consider to be a reasonable time after the POP expires for a company who is fully or modified CAS compliant to have billed all Direct Costs on a cost-plus contract? Please note I am not talking about receiving rate adjustment invoices - just when I should reasonably be able to expect confirmation that all direct costs have been billed. Am I crazy to think that 8 months after POP is too long when no subcontractor labor was involved (actually I think that's too long even when subcontractor labor is involved)

Hi woops85,

CAS compliant has nothing to do with it. Accounting system adequacy has nothing to do with it. The only correct answer is that you should expect to pay for costs incurred through the end of the POP whenever they are recorded to a contract that has not yet been closed-out.

Reasons for "late" charges might include: correction of inadvertent mischarges, late vendor invoices, etc.

The government expects its contractors to process credits related to the contract even after close-out. See, for example, 31.201-5, Credits. Why should the contractor not expect to get reimbursement for allowable and allocable contract costs incurred up to the end of the POP, even if they are recorded "late"?

Hope this helps.

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Guest Vern Edwards
What does this community consider to be a reasonable time after the POP expires for a company who is fully or modified CAS compliant to have billed all Direct Costs on a cost-plus contract? Please note I am not talking about receiving rate adjustment invoices - just when I should reasonably be able to expect confirmation that all direct costs have been billed. Am I crazy to think that 8 months after POP is too long when no subcontractor labor was involved (actually I think that's too long even when subcontractor labor is involved)

"Too long" for what? Too long to expect to be reimbursed, or too long to expect that you won't be irritated by the delay?

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"Too long" for what? Too long to expect to be reimbursed, or too long to expect that you won't be irritated by the delay?

Definitely the latter :D Mostly irritated by fact that after 8 months they can/will not tell me if they have billed all direct costs and they have closed out their books for their fiscal year. Only after expressing my dearest hope that their finance department understood the difference between direct and indirect costs sis they say they were "holding" a cost to be billed until they got their DCAA actuals back. That way if adjustment was in Government's favor, they could use unbilled cost to offset any credit they owed. I understood the reasoning but was frustrated by the refusal to identity what the unbilled cost was - labor, ODCs, a tools purchase - or the estimated amount. Given we have one vendor who is still waiting on their 2000 actuals from DCAA, I wanted to know a ballpark figure in case funds near cancellation.

I need a smiley for beating head against wall.

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Only after expressing my dearest hope that their finance department understood the difference between direct and indirect costs sis they say they were "holding" a cost to be billed until they got their DCAA actuals back. That way if adjustment was in Government's favor, they could use unbilled cost to offset any credit they owed.

The situation you describe is not right.

First of all, there is no such thing as "DCAA actuals". The contractor submits its proposed final indirect cost rates -- and certifies to them -- and DCAA audits the submitted rates. Some work may be done on direct costs, or not, depending on how DCAA approaches its audit. The ACO then uses the DCAA audit report to establish a negotiating position. (Granted, sometimes rates are established unilaterally.)

Second, in today's environment a contractor might be waiting for--literally--years before getting to the negotiating table with its ACO to finalize indirect cost rates for any given year. And even then, it's 50/50 or worse regarding how many Boards of Review the ACO will have to go through to obtain management approval of the rates s/he negotiated.

Third, does this contract contain the Limitation of Cost clause and, if so, how does the contractor intend to comply with it if the additional billable cost pushes it over the contract's estimated cost?

Fourth, this is just plain stupid from a contractor's cash flow point of view. Bill the costs now and process the credit later.

I now see where you're coming from. This contractor needs help.

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Guest Vern Edwards

FAR 52.216-7, Allowable Cost and Payment (DEC 2002), paragraph (d)(5),instructs the contractor to submit a "completion invoice or voucher" within 120 days after settlement of final annual indirect cost rates, unless the CO grants a longer period. The clause otherwise sets no deadline for billing direct costs and I know of no other deadline. A CO could work with a contractor to obtain earlier submission of direct cost billings, but I know of no contractual basis for compelling earlier submission. Here_2_help is right--it's stupid for the contractor to delay invoicing. Perhaps you should point that out to the contractor. Otherwise, I see nothing else to discuss.

I don't give smileys, but you have my sympathy.

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Fourth, this is just plain stupid from a contractor's cash flow point of view. Bill the costs now and process the credit later.

I now see where you're coming from. This contractor needs help.

Additionally, the contractor may find the DCAA saying they have an internal control weakness in their billing system for holding out these costs, and lots of things are causing direct billing authority to be rescinded nowadays, expanding the impact.

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