REA'n Maker

Now Sec. 080603? (as revised Feb '16) http://comptroller.defense.gov/Portals/45/documents/fmr/current/03/03_08.pdf

The odd thing is that according to FPDS, it looks like the current obligated amounts on the 2 Watson contracts are mere peanuts. Like everything else from IBM, the final answer will surely be to outsource everything to India. I find it very disconcerting when technologists insert themselves into this field - try and convince a single IT guy that automated clause logic is crap. They've been claiming victory on that one for 10 years now.

I also don't use the word "idiot" on professional forums, don't make a habit of accusing entire groups of people I've never met of being "incompetent", nor do I lack the basic social skills of a fully functioning adult. But some day, in the not-too-distant future, I hope to develop my chops to the point where I too can cut-and-paste from FAR Part 15, as opposed to summing up the issue succinctly and with a little humor.

Unfortunately, there is no clause which reads "The CO shall not request pricing data which makes no sense considering the situation and which cannot be properly evaluated anyway".

I thought that's what I said in my first post: the DC and O/H pool on which the proposed FCCOM was based were not deemed by the CO to be applicable to this effort. I certainly didn't mean to suggest that CO was going around checking whether specific assets are being employed on a specific contract; I was using 'capital asset' in the only context that made sense in regard to FCCOM, i.e., the cost pools which account for those capital assets.

"Your post about use of capital assets on an individual contract being dispositive regarding the allowability of FCCOM with respect to that contract is just wrong. " I was merely making the shorthand point illustrated by your scenario above: maybe the CO was saying that Engineering labor was not an appropriate direct charge for the effort in question. I've seen stuff like this when a contractor proposes engineering work on a follow-on production contract (i.e., the instant contract is not reasonably expected to employ the engineering DC & O/H pool to which the allowable FCCOM is applied). If I as CO don't accept the direct charge and its O/H pool as reasonable, allowable, and allocable to my contract, I certainly don't incorporate the associated FCCOM into my counter, regardless of CAS. That is a possible circumstance in which FCCOM would not be "allowed", as the OP stated. (I suspect the OP was a bit imprecise in their terminology when stating the CO said FCCOM was "not allowable", which cannot literally be true). You almost make it sound as if the mere fact that the contractor proposes FCCOM makes it acceptable - that's not what you meant, is it?

My point is that the issue may actually be that FCCOM is not allocable to that contract rather than not allowable per se. " In other words, the contractor accounts at the total company level for facilities cost. This total, which is divided into various overhead pools as determined by the contractor, is then allocated to an individual contract based upon that contract’s use of direct charges that those overhead pools would be applied to" https://dap.dau.mil/aap/pages/qdetails.aspx?cgiSubjectAreaID=3&cgiQuestionID=108904 Further: "The business-unit's facilities capital cost of money is then broken down by overhead pool and allocated to specific contracts using the same allocation base used to allocate the indirect costs in the overhead pool.... The estimated facilities capital cost of money is specifically identified or proposed in cost proposals relating to the contract under which the cost is to be claimed. " http://www.acq.osd.mil/dpap/cpf/docs/contract_pricing_finance_guide/vol3_ch10.pdf For example, job-related training is allowable, but not allocable to every contract (compared to alcohol and/or the CEO's summer lake house, which are never allowable OR allocable). In short, Allowability requires Allocability: http://www.dcaa.mil/FAR_Cost_Principles_Guide.pdf

Absent some action on the part of the government during performance which caused you to be harmed, I fail to see where an REA would come into play. A belief that you're not charging enough is not 'harm'.

Maybe the CO feels there's no requirement to employ capital assets? Occam's Razor and all that...

It all goes back to Vern's original point: is it reasonable considering the circumstances, and is it 100% allocable to a contract? Bottom line, contractors may or may not reimburse their employees for parking, at their discretion, with the attendant risks of disgruntled employees feeling like they are being taken advantage of. There is no CLIN for 'parking' on any contract I've ever seen, so it's a business decision whether to take it out of overhead. The only time I could ever see parking not be deemed 'reasonable' is if someone was using pay parking when free parking was otherwise available, i.e., "never".