

Neil Roberts
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Providing comments and references for educational purposes. No legal advice is given or intended.
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@Drew, the structure of your prime contract and the language in 52.244-2 does raise some questions. I think I would wind up saying that at a minimum, you are required to submit for consent fixed price procurements that are charged to a cost reimbursement ODC that exceed the greater of the simplified acquisition threshold or 5% of the total ODC estimated cost for all such fixed price procurements thereunder. As a result, I would discuss that interpretation with the customer. It seems to have turned out that you and the customer wish to have more oversight than that. As a result, I would seek some way to obtain something in writing from the customer that your business is comfortable to rely on to protect your business. Protecting from what risk? My experience is that you may be in technical breach of the contract requirements in submitting all such fixed price procurements. The well known major prime contractor I was with was accused by the government audit function of causing the government to waste time and money in reviewing consent submittals that were not required by the contract requirements. It is good to have something in writing to back it up, even if it is not an actual language change to the clause itself, even if you have great government program and government contracting function relations. Your choice as to the risk level.
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My experience in the contractor world and my interpretation of 52.244-2 is that prime contract CLINS alone, do not determine what if any consent applies to the subcontract. The overarching prime contract estimated cost and contract type, and the subcontract dollar value and contract type, are needed to apply the requirements therein. If the overarching prime contract type is cost type, my view is that the $70,000 fixed price subcontract is subject to consent only if it exceeds the greater of the simplified acquisition threshold or 5% of the prime contract total estimated cost. When you have time, take another look at 52.244-2 and maybe give this your consideration.
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@Mary D FYI, the following are pro forma terms incorporated by a well known prime contractor in every T&M subcontract under a government prime. FAR 52.216-7, Allowable Cost and Payment (AUG 2018). This clause applies only to the portion of contract that provides for reimbursement of materials (as defined in FAR 52.232-7) at actual cost. The term “Contractor” means “Seller,” the term “Contracting Officer” means “Buyer’s Authorized Procurement Representative” except in paragraph (g) where “Contracting Officer” means “Contracting Officer or Buyer,” and the term “Government” and “United States” means “Buyer” except in paragraph (a)(3) and (b)(1)(ii)(F), where Government means “Government and Buyer.” Paragraph (d) is deleted. Subparagraphs (a)(2), (b)(4), and paragraph (f) are deleted. In subparagraph (h)(2)(ii)(B), the term “6 years” is deleted and replaced with the term “5 years, 9 months.” The blank in paragraph (a)(3) is filled- in with the word “30th” unless otherwise specified in this Contract. FAR 52.232-7, Payments Under Time-and-Materials and Labor-Hour Contracts (NOV 2021). The term “Contractor” means “Seller,” the term “Contracting Officer” means “Buyer’s Authorized Procurement Representative,” and the term “Government” means “Buyer.” Paragraph (c) is deleted. In paragraph (g)(2), the term “6 years” is deleted and replaced with the term “5 years, 9 months.” The reference to the Allowable Cost and Payment clause in paragraph (b)(4), means FAR 52.216-7, Allowable Cost and Payment (AUG 2018), and reference to the “Disputes Clause” means the “Disputes” Article of this Contract.
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@Outerspace, typically, in my experience with generally included contract terms from the prime for a cost type contract, the first sentence is typical asking from the prime. If you have objected to disclosing this info to the prime, the prime may ask the government to review your invoice, which process would delay payment to you, and my experience tells me the government eventually would decline that. If none of your subs are cost type contracts, in my opinion, the prime request is unreasonable with respect to subcontract information, unless there are some contract terms to the contrary requiring you to do so. None of this information would be sent directly from you to the government, unless as I said before, you have objected to disclosing that information to the prime and you have included such a right in the contract and/or ensured there is no contract terms requiring you to provide this information directly to the prime.
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Put AI to work on it.
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@GovKorYes, your company can adopt a policy requiring independent estimates before subaward solicitations. If you do not have the expertise in house to do so, I suggest you spend some money to have an outside consultant provide it. It would tend to made you a whole lot smarter before bidding and negotiations and about a project I assume you are responsible for overseeing from a cost and technical standpoint, even if your estimate was only able to focus on labor rates/categories and expected length of project. The process of estimating might also make you a more attractive source for other customers.