lacylu

an update - initial analysis is that its not a cost accounting change to their practices

Yes I learned something

very interesting ! Thank you so much !

in response to Retreatfed, there was a revision submitted , adding some new segments , shifting some indirect charges now to direct and creating new labor rates, all to an existing CAS disclosure

Thanks for your feedback here_2_help. It is very frustrating because the company is basically throwing stuff over the fence and expects us to accept the increases. I am not one to just accept anything I have appointments set up with my procurement attorney , management etc... I have reviewed the CAS disclosures and provided my comments to the company, however, their position is, because there is no change in "cost accounting practices" they do not have to provide an impact analysis. Although , they do plan to provide information pertaining to the changes, I guess similar to cost impact And due to this "realignment" costs will increase for future anticipated work as it stands for now. They even went on to quote a 2002 memo from the Director of Defense Procurement at the time. Smoke and Mirrors

the ACO has not come to a determination as of yet , and a few months is what was stated to review the information. I was told by the contractor since it was not a change in the accounting practices, no cost impact analysis would be provided to us (which I asked for as soon as I was informed of the realignment) Can you expand on your last statement, .."that the government may not be required to accept the new rates for other reasons..." I'm concerned about the new work coming down the pike.

they contend it will take a few months to determine if there is a change to cost accounting practices. In the meantime the company plans to update all future change proposals with the new rates

update : there is no change in their cost accounting practices according to the company . My plan is to try to negotiate these rates as to not adversely impact the contract.

Thanks for the info . I did have a discussion with DCMA after I posted the last message.They are in the process of accessing the overall govt impact and that's if there is a change to the cost accounting practices

Yes, just a little overwhelmed. I will have to get the answers to your questions, being fairly new to the contract , just unsure about your questions. But you have given me something to think about. I believe new disclosures were submitted. Also, due to the 2016 National Defense Authorization Act, signed by President Obama on November 25, 2015, Congress prohibited DCAA from providing audit support for non-Defense Agencies . I still plan to call them to ask questions.

Yes, the company did a reorganization. Yes the company change its accounting practices due to a new division. You are correct about the billing rates for T&M , however, we also have cost type clins and FP. There are established T&M rates for billing purposes and we provided additional value on the contract when we receive change proposals. When there are change proposals, and we have a bunch of them, the change proposals reflect the new rates. They have also adjusted the FP clins to reflect the new labor categories without prior discussions as to the new skill mix conversion. Again, for the purpose of adding value. I've just been on the contract for a few months so I'm still gathering information. As for the change proposals the new rates with the new labor categories and skill mix have been adjusted on these change proposals in process and thats how I can determine its an adverse impact to the contract. Your right about the stop work ... I sent a letter asking for the cost impact analysis also, waiting on that. In the meantime , just wanted to hear what people had to say about whats going on. Thanks for your information

Hello Everyone, I have a contract with a large company. We have been informed of a "company restructure" .This restructure ,of course includes rate increases ( indirect & direct) which adversely impacts the existing rates in the contract. The contract type is a mix of CPFF, T&M & FP. What recourse do I have regarding the acceptance of these increases. I have not accepted anything at this point based on limitation of funds clause and the fact they did not inform us 60 days prior in accordance with CAS clause in the contract. Also, they stated their new labor categories (with much higher rates )have been allocated against my contract hours based on "all" of the contracts within this new organization and not specific to my contract. That seems like it would conflict will allocability required under cost type contracts . I would think they would consider the existing effort it takes to get the job done and not against "all " of the contracts under this new organization.

First , thank you for taking the time to provide me with the questions so you can attempt to assist. the supplier of the COTS items is apart of an "approved supplier list" of which the Govt can choose. So I would say the answer to your question is a little bit of both. This contract is a major systems contract with a variety of contract types

sorry, I haven't provided enough information. I am new to this contract and what I provided was provided in the meeting. This was my first meeting and to here the Prime state they were not responsible for COTS products from their supplier that didn't work was just a little surprising. Can you suggest information I can provide to you in order to get feedback.

This may be an obvious question, however, I must ask based on my experience today in a meeting. So program review with the Prime contractor today revealed the government is responsible 100% for the replacement costs, engineering change proposals (ECPs) related to COTS products that did not work . My initial response was the Prime should accept some responsibility for the product not working from their supplier. The prime's response was that the supplier will not take back the COTS products. This Prime also submits numerous ECPs under CPFF type with no incentive to complete negotiations. I am pretty new to this contract and just trying to wrap my arms around these discussions. I just can't believe the Prime would have no responsibility in this replacement of the product that doesn't work. They claim its COTS and its nothing they can do. Please provide your thoughts .... seems simple but maybe I'm missing something