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Neil Roberts

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    Providing comments and references for educational purposes. No legal advice is given or intended.

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  1. @FLContracts, Additionally, from the prime contractor you should request a copy of the memorandum supporting the subcontractor proposed rates and a copy of the SOW and RFP/ITQ sent by the prime to each subcontractor. Should you wind up not finding the proposed rates supported enough, you may wish to consider proposing adding special surveillance contract requirements to the prime contract for each of the subcontracts that have questionable rates . The surveillance should include but may not be limited to advance notification and prior consent for each such subcontract/change.
  2. Thanks, Don. You beat me to the punch. @Retreadfed, still unclear to me what you are trying to tell the poster. Are you saying that the poster gathered comparable labor rates are not valid with respect to a prime contractor's subcontracted labor rates unless: "Factors that may be relevant include, but are not limited to, conformity with compensation practices of other firms- (i) Of the same size; (ii) In the same industry; (iii) In the same geographic area; and (iv) Engaged in similar non-Government work under comparable circumstances."??? In any event, the issue is the prime contractor's review, evaluation and substantiation of its subcontractor proposed rates.
  3. @Retreadfed, could you elaborate about the point in your post reference to FAR 31.205-6(b), which concerns personal services? The FAR definition of personal services is: "Personal services contract means a contract that, by its express terms or as administered, makes the contractor personnel appear to be, in effect, Government employees (see 37.104)."
  4. You should ask the prime to make a presentation to you with in depth details regarding the justification for salary.com being the only source for comparable prices, and a complete review of each and every detail input into salary.com by the prime that led to the results proposed. Also they should provide the job description of each position from each sub. In addition, you should tell them how many subcontract dollars your analysis yields vs the total for each proposed subcontract.
  5. Just a point of information regarding reducing proposed rates and quantifying proposed cost savings. Proposed contractor rates are included in overall estimated costs, which is used as a basis for establishing fixed fee, which in a cost plus fixed fee contract can not exceed 10% or 15% of estimated costs per FAR 15.404-4, depending. The contractor is reimbursed actual costs, not estimated costs. So, if you "save" $100,000 in proposed (estimated) costs through negotiation, the actual "savings" may be no more than $10,000 or $15,000 in fixed fee not $100,000, and the contractor's actual cost reimbursement may eat up $10,000 or $15,000 or maybe $100,000 anyhow.
  6. @Sarita, Alaskan Native Corporation (ANC)/joint venture/8(a) awards are a relatively small specialty area. Generally speaking, one would like to know the terms and conditions included in the ANC contract, such as FAR/DOD clauses and Small Business Administration regulations that may be applicable. Sometimes, details that you seem to be looking for are clarified during the "legislative history" process that established the clause or regulation. There is no way to research that either without knowing the applicable clause/regulation number. If you any any such information, please share it.
  7. It may be a good practice to provide for a review and favorable termination terms when when the total cumulative dollar amount ordered exceeds the estimate by a certain amount or % because that could be an indication that perhaps it needs to be re-evaluated as to whether it should be re-competed.
  8. I think you are on the right track and your attention to detail in this matter is admirable. However, you work for a company that has created the contractual impression in the past that adding this clause is commonly acceptable to your company. My experience is that many contractors are focused on the statement of work and price more than the many terms and conditions. I believe you should take steps to be confident that you don't object to a contract clause that the company has already assessed as an ok risk before you proceed further with such steps as discussing with the level above the contracting officer. Or, maybe your position is better handled by the program office contacts with the customer.
  9. FAR Case 2021-020 proposes (at 89 Federal Register 2910 dated Jan 17, 2024) to change FAR 52.219-14 essentially as changed by the DOD Class Deviation with respect to exclusion from the 50% rule. Public comments are due March 18, 2024. North American Industrial Classification System (NAICS) code 562910 is just by way of example in both the DOD Class Deviation and the proposed FAR rule change. Your company may wish to obtain an opinion from an attorney/CPA experienced in the industry as to the degree to which rationale in your situation is a reasonable application of similarity to the example. This may serve to give your company more confidence or concern whichever the case may be for your company's business decision.
  10. University of Utah rate agreement with the government which defines modified total direct costs. See https://osp.utah.edu/_pdf/f_a_rate_agreement_2022.pdf
  11. I am not well versed in this area but perhaps it is driven by federal regulations that control government contracts. It appeared to me that Code of Federal Regulation (CFR), 2 CFR 200.414 might be a fair start? see https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-E/subject-group-ECFRd93f2a98b1f6455/section-200.414
  12. @On to Consulting, my suggestion is your company hire an experienced consultant to work with you regarding all the terms used in your post to sort out the applicable situation so that your posting question can be answered, due to use of the following terms in the post: 1. downward adjustment 2. contracted G&A rate 3. contracts with lower indirect rate 4. varying rates that are negotiated with other customers 5. actual rate 6. actuals 7. true indirect rate 8. agreed to rate 9. discount the client is giving on payment terms
  13. The posting was concerning G&A "over the years," and it was not stated that or how current cost or pricing data was required either "currently" or with commercial contracts "over the years." If the government was independently concerned with contractor subsidizing the contractor’s commercial work, it should perform an audit. How would they suspect this? Are you suggesting the contractor should perhaps voluntarily advise the government that "over the years," the company "contracted G&A rates all over the board with no regard for actuals or consistency?" I am having doubts about what the posting means with "contracted G&A rates."
  14. I am not aware of the FAR Table 15-2 item that requires a contractor keep track of and review all prior commercial contracts as to what its internal allocation of G&A rate were in each such contract, and or, what it proposed as such a rate. Not clear to me what "based on" means in each contract situation and why it is a disclosure item in general. Have the same question of @On to Consultingwith respect to the term "downward adjustment." Is there a contract line item G&A rate in each contract? Even so, the parties can negotiate any contract line item G&A rate the parties want. I can't see its relevance.
  15. @Needforspeed, what your are asking is more of a legal question. I asked the internet something like "52.242-5 contractor never pays subcontractor", and found the following result: https://www.jdsupra.com/legalnews/government-involvement-when-prime-1226148/
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