AlsoExDCAA

Need more information, but if I was a for-profit entity in this situation as I imagine it ("As this would be our only non-profit making project"), I would first make myself aware of the multitude of terms and conditions that are required to be flowed down by recipients of Federal awards to subrecipients through subawards under 2 CFR 200. I'd first read through the "Subrecipient vs. Contractor Checklist" and determine whether my entity's services are truly that of a recipient/subrecipient vs that of a contractor/subcontractor. If the latter, I'd push back on T&Cs with the prime recipient and price accordingly. If the former, like here_2_help stated, not enough info here.

See the definition of 'immediate owner' and required representation per FAR 52.204-17 : "Immediate owner means an entity, other than the offeror, that has direct control of the offeror. Indicators of control include, but are not limited to, one or more of the following: ownership or interlocking management, identity of interests among family members, shared facilities and equipment, and the common use of employees. (b) The Offeror represents that it □ has or □ does not have an immediate owner. If the Offeror has more than one immediate owner (such as a joint venture), then the Offeror shall respond to paragraph (c) and if applicable, paragraph (d) of this provision for each participant in the joint venture."

Experienced this cluster with a capital F over the years. Prime flows down 52.216-7 + the kitchen sink in its T&C's with the sub. Prime's standard USG T&Cs include instructions to replace terms like 'Government' and 'Contracting Officer' with 'Buyer' and 'Buyer Representative', except all too often there is a carveout for audit responsibilities. The CPFF subcontractor will submit an ICS to their local DCAA office. In DCAA's review of the ICS, they see no prime contracts, so it gets placed in the sub's contract file without an adequacy review, citing FAR 52.216-7(d)(5): "...The prime contractor is responsible for settling subcontractor amounts and rates included in the completion invoice or voucher and providing status of subcontractor audits to the contracting officer upon request." Contract privity only exists between the USG and the prime, and between the prime and the sub. Contract years go by, the prime is unaware of its responsibility to finalize rates with this sub. Prime asks the sub constantly for its final annual indirect rates. Sub says they have nothing from DCAA, unaware DCAA has no reason to audit the sub's rates. Then the prime wakes up and realizes they have the responsibility to finalize the rates to close out its subcontract with the sub, but wants to see the ICS in order to do so. But guess what, sending the ICS to the prime wasn't part of the contract. In my anecdote, the absurdity is magnified by the fact the sub also had a cost-type sub to a competing prime for similar deliverables, and had NDAs in place with each prime stating 'proprietary cost data' will only be shared with the USG.

Am I being too much of a literalist to respond with: "whatever is identified and agreed upon in advance" and then memorialized in the contract?

"Facilities Capital Employed" is one of the four profit factors a contracting officer looks at in the weighted guidelines method approach for determining a prenegotiation profit/fee objective on negotiated actions requiring certified cost and pricing (excl CPAF). See https://www.acq.osd.mil/dpap/dars/dfars/html/current/215_4.htm#215.404-71 The KO is following the PGI on their end to obtain the info necessary as part of the weighted-average guideline calculation. The instruction under PGI 215.404-71-4(b),(c) specifically calls for info from the DD-1861. Granted the DD-1861 is supposed to be completed by the KO, and if they wanted it from the contractor they should have specifically requested it as a solicitation instruction, but this is really what they're trying to accomplish here.