Jump to content

Paying for time onboarding?


Freyr

Recommended Posts

We have a T&M contract set up for which requires the contractor personnel (researchers/SMEs) to get cleared prior to working, pretty normal stuff. The tasks/deliverables don't include them onboarding, they just have to provide the personnel and get them cleared before working on those tasks. The issue is that the process has taken a while and the contractor already has those people on the payroll. We got the first invoice in today and it seems the contractor has billed hours for personnel who have been in the middle of the clearance process, and in one case they were in the middle of the process and decided to take another job. The Government's gotten zero benefit from those hours and they're not tasks or deliverables from the SOW, I can't imagine we could or would want to pay for those hours. My CO agrees and she thinks the money should come out of the contractor's pocket. So is it normal for contractors to bill for these hours or are we being unreasonable in not wanting approve this? 

Link to comment
Share on other sites

It is normal for contractors to charge preparation costs to overhead accounts.  Those indirect costs are part of the hourly rate.  When the contractor starts real work, it will re-coup those on-boarding costs through those indirects.

Para. (a)(3) of the contract clause at FAR 52.232-7, Payments under Time-and-Materials and Labor-Hour Contracts, indicates that the Government pays for labor performed on the contract.  If the contractor has not performed any labor on the contract, it is not entitled to any hourly rate payments.

At least, that's how I see it.

Link to comment
Share on other sites

I would ask the contractor to provide a policy, procedure, or other support for its practice of treating non-qualified personnel charges as billable direct labor charges on T&M contracts. The personnel are not qualified because they don't have clearances, and the contract specifies that only cleared personnel may charge billable time. (They could charge the time non-billable, but that's not what you asked about.)

Asking them such a question is a nice thing to do. It's in the nature of a warning shot across the bow.

If you're not feeling merciful, you can get the auditors involved. If you want to cut directly to the chase, you can issue a Notice of Disallowance.

If you're feeling angry, you can turn it over to the appropriate investigating authorities to see if they want to charge the contractor under the False Claims Act. But why be mean? Give them a chance to think about the implications/consequences of what they've done. That's my advice.

Link to comment
Share on other sites

Guest
This topic is now closed to further replies.
×
×
  • Create New...