sprice11

I have given up on trying to persuade DCAA. I am now going directly to the PCO/ACO. However, they seem to be extremely reluctant to go against the advice of another agencies recommendation. I do truly wish I go into further detail without DOXXING my company/myself. There have definitely been some quotes by DCAA, and KO that made me wish I recorded the meetings.

We have discussed using the pre-contract cost agreement for future contracts/delivery orders. Now, how is it that the costs proposed, and the methodologies used to arrive at those costs, followed consistently (FAR when followed exactly as proposed, are somehow now questioned when incurred in the exact fashion as we proposed they would be? Since cost and pricing data were required, wouldnt FAR 15.404-1(A)(3) apply (ie. evaluate the reasonableness of individual cost elements)? Also, payments were never questioned. All invoices we submitted were paid in full. The issue is that DCAA, after performing the required yearly audit, has now come back and is questioning reasonableness of the specific costs. And they are using a regulation that is not included in our contract (DSSR) to base their finding on. I do appreciate the responses, but I believe that we might have a misunderstanding of what is actually being asked about. And this may be due to the fact that I am not making myself clear. The issue I have is that the Contracting Officer found these costs to be fair and reasonable based on 1) past cost/pricing for same exact services, 2) other contractors offer similar costs.......DCAA didnt say these were expressly unallowable, or say they are unallocable, they say that no reasonable contractor would charge more than the DSSR rate. Then used the DSSR as a basis for their finding, even though DSSR does not apply/is not required per our contract.

Joel....I just answered some of the questions H2H had. Now, I can answer some of yours. 1) non-competitive . We provided our cost and pricing data, methodologies, etc....technical review was conducted by govt, and seeing as contract was released found to be fair and reasonable 2) It was post award, questioned costs. And the basis of their questioning the costs is reliant on a regulation that is not in our contract. That is the reason we are looking for the PNM. To show that the Contracting Officer found our proposed costs/pricing to be fair and reasonable. We did not change the way we account for these costs, or incur these costs..... My question for you now is why would you be reluctant to release the PNM? You said "And then I would redact out my prenegotiation objectives"...I already have a govt produced spreadsheet showing our position, their position, all counter offers, and the final negotiated amount. However, this is not the same as a completed PNM.

Here to help: 1) Contract type IDIQ with CPFF Delivery Orders placed against it. 2) DCAA is not alleging defective pricing. Instead they are questioning costs based on unreasonableness.....which they are basing on a requirement not included in our contract 3) That is all that is being questioned. I hope this helps clear up some of your questions.

JJ, first off, thanks for your replies. However, I do disagree with you here. 1) The contracting officer found that our estimated costs to be fair and reasonable. Meaning we provided them the exact methodology we would be using to when billing the costs that DCAA has since found to be "unreasonable". 2) yes, the burden is on the contractor to provide that any an all costs are reasonable. We have done so. We have done so b y showing other contractors charge the same or more for similar "incentives", have done so by showing that the contracting officer/DCAA has found these costs to be reasonable going back over at least three different contracts, and over 20 Delivery Orders. We didnt all of a sudden change our methodology. We provide the company plans and procedures that clearly show these are/have been company policy for years. 3) Finally, DCAA is questioning the incurred cost, and questioning the costs based on something that is not in our contract (DSSR). Now, I could understand if our incurred cost differed wildly, and were incurred in a way inconsistent with our estimated cost. However, this is not the case. You also said the following "Remember, a PNM only records one party’s side to a negotiation.". Well, the PNM must show, as required by FAR 15.406-3 - Documenting the Negotiation "(11) Documentation of fair and reasonable pricing." - This is what I am getting at. We, as a contractor, have no say on this documentation. The fact they let the contract shows it to be fair and reasonable.

The Contract, and multiple negotiated Delivery Orders against the contract have already been awarded. Retreadfed is correct in that DCAA is the one questioning fair and reasonableness of negotiated costs. I did use the fact that the contract was awarded as my basis for saying costs were already determined to be fair and reasonable. However, now even the Contracting Officer is taking DCAA's side. It is a very interesting discussion we are having with both DCAA/DCMA/PCO.... We were not given a reason why they cant release it to us....So Im guessing FOIA would be the next step. Thanks for the information.

I have requested the Price Negotiation Memorandum's for multiple Contracts/Delivery Orders from our Contracting Officer. They said that they are not able to provide us with the documents. Does anybody know if it is possible for the Contractor to obtain this information from the government? I have asked for it because it would show that the Contracting Officer has found our price/cost to be fair and reasonable.

Yes, I am familiar with that audit guidance, and with the fact that it is flawed.....DSSR Rates basically my arguments boil down to a few things: 1) DCAA said "We do not believe [company name's] practice of providing rate allowances that exceed what is allowable for Government civilian employees to be costs incurred by a prudent person in the conduct of competitive business." Makes absolutely zero sense, and is not based on any policy, or contract clause. In negotiations with the government we made perfectly clear how we pay for hazard, incentive, etc pay, and provided the plans and policies to back this up. We even showed that other companies charge much higher %'s. 2) The Contracting Officer already negotiated this pricing structure with us. By going back now and changing the rules, shows that the govt (a) didnt adhere to the FAR when it requires pricing to be judged fair and reasonable before letting a contract, (b) how are we to negotiate in good faith going forward if they change the rules 3) DCAA said that since the DSSR is mentioned in the FAR that it should apply to us. This makes the least sense of it all. We are under no contractual basis to follow the DSSR. Yes, there are contracts that do require it, but ours does not. I believe this would equate to a constructive change of contract. At least that is an overview of three points we will make. I have also written to the PCO in order to obtain the Pricing Negotiation Memorandums that are required to be placed in our contract file. However, I am not sure they have to share this information. Please if you have any other arguments to make, share away!

Sorry, for taking so long to reply. JJ20874 - No, the ACO has not yet agreed to the finding, but we had a discussion with the PCO today, and she said she plans on agreeing with it. Here_2_help - This was my exact point to both DCAA, and the ACO. That is exactly how we allow our deployed employees to charge. In fact, our HD incentive pay is well documented in our policies and procedures, and they are provided to the PCO before each task order is released. No overtime is allowed on the contract.

My company is currently having a disagreement with an audit finding by DCAA that states the following: " "We determined the costs to be unreasonable due to the allowable rates applicable to Government civilian employees, per the Department of State's (DoS) Department of State Standardized Regulations (DSSR). We do not believe {COMPANY NAME} practice of providing rate allowances that exceed what is allowable for Government civilian employees to be costs incurred by a prudent person in the conduct of competitive business." My argument with DCAA, and our ACO is this: 1) we negotiated the ODC/TDY/Hazard Rates with the government with our proposal, and costs were accepted by the Contracting Officer to be fair and reasonable before the contract was let. 2) the DSSR does not apply to our contract. 3) FAR 31.205-6 -- Compensation for Personal Services (f) Bonuses and Incentive Compensation.......as these costs are considered, in our opinion, to be incentive pay in order to get people to deploy to the parts of the world they do..... Can anybody let me know if those arguments are good? I also made the point that if DCAA can come in after all the work is completed, and try to apply a regulation that does not apply to our contract, then how are we to ever be able to negotiate with the government in good faith again..

Retreadfed, The contract does include both teh LOC and LOF clause. However, all work under this contract was performed within the funded amounts. The reason the extra funds need to be added is due to the fee (CPIF, sharing at 60/40), and reconciliation of billed amount vs finalized DCAA rates (not finalized yet, as they are behind).

Retreadfed, as a small company we monitor our indirect cost rates every 6 months to a year. We do give the government notice, but we are not experiencing an overrun based on the estimated total cost of the contract. We were never funded fully to the estimated total cost of contract. Also, the fee is based on a share percentage, "The fee payable under this contract shall be the target fee increased by 60 cents for every dollar that the total allowable cost is less than the target cost...". We are not experiencing an overrun, we are experiencing a contract that wasnt funded to the estimated cost.

Retreadfed, by saying that the contract is not fully funded I mean they did not fund the contract to the estimated cost. We did not perform in an overrun situation. All work was provided within the amount funded. The need for additional funds comes from our incentive fee, and estimated reconciliation of indirect costs.

I missed this one: What, exactly, do you want advice about how to "mitigate"? I trying to find to make it so we dont run into this issue again (ie. having to ask for money). We report our funds status every month, the issue with this CPIF contract is that the fee typically puts us over what is funded. The government doesnt take this into consideration, even though I explain to them all the time. Now, since DCAA wont approve any of our reconciliation vouchers (I submit every year after completing our Indirect Cost Submission/Proposal), can I ask the PCO/ACO to apply quick close-out procedures to our contract? I have never been involved in a contract with quick close-out, so what do I need to get that approved?

here_2_help, I am not another "drive-by interlocutor" as you say above, I just did not have time to sign back in due to being busy at work/home. Now to answer some of the questions from above: 1) May I ask why you waited for 6 years (or 8 years) to submit the interim voucher and request additional funds? I waited this long because when I first submitted my reconciliation voucher (immediately after completing each years Interim Cost submission), each voucher was rejected due to the fact that rates have not been finalized by DCAA. I submitted the interim voucher in order make the PCO, ACO, and DCAA aware of the fact that this has been needed for a long time, but kept getting rejected. 2) Why didn't you submit the request immediately after submitting the proposal to establish final billing rates? See answer above. 3) Are you confident that you complied with the Limitation of Cost clause in your Delivery Order or ID/IQ? Yes I am. 4) Is the contract a cost-reimbursement contract? Yes it is 5) Did your company literally submit a claim--an official term defined in FAR 2.101--six or eight years ago, or did your company submit a final indirect cost rate proposal? We submitted all of our annual indirect rate proposals. I apologize if I used the word "claim", as this is the exact wording that DCAA has given me (Indirect Cost Claim). I am aware that it is a rate proposal, but I also understand that people do call it an indirect cost claim as well. 6) Have you been waiting for DCAA to make a final indirect cost rate determination or to approve the completion voucher? Both. DCAA has only made final indirect cost rate determinations through year 2007. 7)