Corduroy Frog Posted December 28, 2020 Report Share Posted December 28, 2020 The new stimulus signed just today has a provision for yet another PPP loan that will not have to be paid back. There will be people again getting paid without working. I believe the govt has made clear that they do not want this cost in their rates. My suggestion is to open up an account, which will be "Unallowable" for people to charge. My question: This payroll labor in Unallowable should draw their allocation of fringes. Should it also draw allocation of G&A?? Link to comment Share on other sites More sharing options...
Retreadfed Posted December 28, 2020 Report Share Posted December 28, 2020 Frog, have you read FAR 31.203(d)? It should answer your question. Link to comment Share on other sites More sharing options...
Corduroy Frog Posted December 29, 2020 Author Report Share Posted December 29, 2020 Yes, but - I'll reproduce the subsection (d) and focus on the word "properly"... (d) Once an appropriate base for allocating indirect costs has been accepted, the contractor shall not fragment the base by removing individual elements. All items properly includable in an indirect cost base shall bear a pro rata share of indirect costs irrespective of their acceptance as Government contract costs. For example, when a cost input base is used for the allocation of G&A costs, the contractor shall include in the base all items that would properly be part of the cost input base, whether allowable or unallowable, and these items shall bear their pro rata share of G&A costs. On the face of it, any PROPER unallowable cost should receive its share of G&A. It's like adding qualifiers to the discussion. Contracting officers have all been told from above that the PPP stuff should not affect rates. This justifies putting the labor into Unallowable. However, is it fair to dilute the G&A rate for something that should have not happened save the pandemic? Link to comment Share on other sites More sharing options...
joel hoffman Posted December 29, 2020 Report Share Posted December 29, 2020 Yes, it goes into the base if it is a cost to you. Link to comment Share on other sites More sharing options...
here_2_help Posted December 29, 2020 Report Share Posted December 29, 2020 On 12/27/2020 at 10:12 PM, Corduroy Frog said: The new stimulus signed just today has a provision for yet another PPP loan that will not have to be paid back. There will be people again getting paid without working. I believe the govt has made clear that they do not want this cost in their rates. My suggestion is to open up an account, which will be "Unallowable" for people to charge. My question: This payroll labor in Unallowable should draw their allocation of fringes. Should it also draw allocation of G&A?? Will you please help me understand how a Paycheck Protection Program loan (issued by the SBA pursuant to Section 1102 of the CARES Act or whatever Section of the new funding Act) is a cost to a contractor? To me there is no cost (allowable or unallowable); there is only a funding source that infuses cash to the entity that qualifies to receive it. CARES Act Section 3610 does permit a contractor to incur paid leave costs and bill the government for them in certain circumstances, if the cognizant contracting officer approves. With respect to Section 3610 billings (and equitable adjustments) there is some agency guidance that seems to state that a contractor cannot be covered for the same cost twice; i.e., if the contractor is using PPP funding to pay employee leave costs, then it cannot seek to have those same leave costs reimbursed by the government under Section 3610. Thus, I suspect you may be confused by the interplay between Section 1102 and Section 3610. Here's a handy DCAA chart to help you navigate the various COVID-19 related programs. Link to comment Share on other sites More sharing options...
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