Suppose a subcontractor has an approved accounting system IAW FAR and submits an Incurred Cost Submission with subsequent cost audits to finalize a Negotiated Indirect Rate Agreement annually. Does the subcontractor have to use a prime contractor's timekeeping system when working under a T&M subcontract ?   What basis would allow the subcontractor to do so?  What assurances (reps/certs) would the prime contractor need from the subcontractor to allow the use of the subcontractor's timekeeping system for T&M work performed by the subcontractor? 

18 hours ago, SFLO said:

Does the subcontractor have to use a prime contractor's timekeeping system when working under a T&M subcontract ? 

1. Does the subcontract require this? If not, then no. If it does require use of the primes system, then yes.

2. Why and what does the prime intend to do with the timekeeping system (e.g., personally maintain the timekeeping data for invoicing the customer, if the prime contract includes T&M line items)?  If the T&M work is strictly between the prime and sub but not the prime contract with the customer, then I assume that the prime wants if for its own subcontract management purposes.

Since the employees work for the subcontractor , the subcontractor will need to maintain and use a timekeeping system, which should be integral to its financial and management systems. In my opinion, the subcontractor would have to maintain duplicate data or copy the prime’s timekeeping data.

18 hours ago, SFLO said:

What basis would allow the subcontractor to do so? 

3. Why? What “basis” are you referring to?

You asked above if the sub MUST use the prime’s timekeeping system? Are you now asking this question, as though the sub wants to initiate the use or voluntarily use the primes system? You said that the sub has an approved accounting system.

Or did you mean “What basis would allow the Subcontractor to maintain the timekeeping system?  Even if the contract requires using the prime’s timekeeping system, the sub can still also use its own timekeeping system. 

 

18 hours ago, SFLO said:

What assurances (reps/certs) would the prime contractor need from the subcontractor to allow the use of the subcontractor's timekeeping system for T&M work performed by the subcontractor? 

Are you asking what assurances the subcontractor must provide the prime in order for the SUB to use its own timekeeping system, not the prime’s system?

I would assume that the sub would have to certify to the prime that the data is accurate and correct. If I were the prime, I’d also require the sub to provide copies of the timekeeping data and audit access to the data.

Sorry but your scenario and questions are ambiguous…

The prime should have some system and a subcontract requirement to get daily(or weekly?) timekeeping data from a T&M sub for monitoring and verification purposes.

This is equally important whether or not the work is priced as T&M in the prime contract with the customer.

20 hours ago, SFLO said:

Suppose a subcontractor has an approved accounting system IAW FAR and submits an Incurred Cost Submission with subsequent cost audits to finalize a Negotiated Indirect Rate Agreement annually. ... What assurances (reps/certs) would the prime contractor need from the subcontractor to allow the use of the subcontractor's timekeeping system for T&M work performed by the subcontractor? 

The only thing the prime should need is assurance that the subK's accounting system is approved. Typically a copy of the determination of adequacy is all that is necessary. If the prime wants more then the prime either knows something about the subK's timekeeping system that the government does not know ... or the prime is clueless.