here_2_help

Hmmm. If I interpreted the allegations correctly, the Hon. Senators are saying that DOD is conspiring with Transdigm to make only small (less than $2 Million) orders for spare parts, rather than buy in quantities that would require submission of certified cost or pricing data. Seems to me that decision would be within the discretion of the KO. And as for Boeing, they seem to allege that the company is using subsidiaries in some fashion to avoid providing cost or pricing data. I'm not sure how -- maybe by claiming commercial item status? In any case, the letter then says Boeing IS providing the data upon request, so I'm not really sure what the issue is. Looking forward to receiving enlightenment.

1. Evaluate each account for risk of incurring unallowable costs. The scrub approach depends on (a) likelihood of incurrence, (b) how much risk the company is willing to take and (c) effort to review. 2. Document your risk analysis. Determine which accounts will be scrubbed -- and how. 3. If you are doing less than 100% transaction reviews and projecting the results, ensure your approach is statistically valid (see FAR 31.201-6(c)). EZ-Quant is the "go to" stat sample program but there are others. In all other circumstances, assume that if DCAA finds anything, they will question the cost they find. 4. After-the-fact scrubs are not a good substitute for 100% allowability reviews at the point of entry into the accounting system. Good luck!

My point is/was: the government may be prevented from asserting its claim. I was less concerned about a potential contractor claim, as the subtext of the original question seemed to be that the contractor was satisfied with the status quo.

The six year clock -- the Contract Disputes Act's statute of limitations -- starts running when a party knew or should have known that it had suffered damages. (Not a lawyer, but that's what I've been told.) So, the question is when the government should have known that it may have been misbilled (assuming it was misbilled). When should it have known that the contract did not comply with 52.216-7 requirements to submit an annual (certified) proposal to establish final billing rates (assuming none was ever submitted)? These are questions for a judge to determine, based on the facts & circumstances presented by the parties. Or the contractor could convince itself that it properly billed and then submit a $0.00 final invoice. Or the government could send in the auditors. Ten years of inactivity is not a great story ... regardless of whether you're the government or contractor.

Agreed this approach is not in accordance with FAR/DFARS/PGI. It's a poor substitute for actual Program Management. Questions: 1. Do you expect DCAA to audit the contractor's invoices? If so, how? Are they going to audit against the contract as formally bilaterally modified, or against MOCAS-reported funding, or perhaps against some PM's notion of what the funding should be? 2. Do you expect MOCAS to track all the funding movements? If so, how quickly do you expect that to happen? How quickly do you expect to issue/receive bilateral contract mods? Not a fan of this approach.

I work with contractors all the time. Most are simply unaware of their contractual obligations. (I ask them if they've read their contract, and they tell me they've read the SOW. Nobody ever reads the clauses incorporated by reference.) The larger contractors are aware, but struggle to have solid processes that support proper notification. Some PMs are reluctant to acknowledge an incipient overrun. Others have trouble pulling actual costs from their accounting systems in a comprehensible manner. The ones who are both larger and have adequate EV systems are the ones who can both project overruns and report IAW clause requirements. Unfortunately, the number of those contractors is rather small in comparison to all the rest. So, yes. It can be done and IS being done by a few of the larger, knowledgeable, experienced primes with good systems. As for the rest, not so much. As contracting officers, you can help the rest of them learn by adhering to the clause requirements and refusing to fund cost growth that is not reported timely as required by the clause.

I think you are right to be concerned. The subcontract is to support your ID/IQ contract, right? So why would there be a PoP that extended beyond the need? I don't see it.

Ask the prime to flow down to you their exemption certificate.

If I understand the situation correctly, the company is moving to a pay-as-you go model. There is no liability on the balance sheet. Is that correct? If so, what does CAS 408 say? It occurs to me that the company can estimate its liability, based on historical usage trends. A liability for the estimated annual usage can be booked. Let DCAA audit that value.

There are no real metrics because -- as you've posted -- each company is different. You don't need KPIs when the situation is clearly evident for those who have eyes to see. Does your company conduct exit interviews? If so, what do they tell the company's executives? The metrics that matter are all about attrition and retention. Those numbers speak loudly.

I wonder if ReadtheContract believes the original question has been satisfactorily addressed?

Contractor employees stay in service-issued tents, eat at the DFAC (or eat MREs) and, in general, are treated like service members all the time. This situation is hardly unusual, though it should have been covered in the solicitation. However, such employees are usually compensated for those inconveniences. They typically receive an "uplift" that covers deployments to difficult locations, such as FOBs. If the government intended that contractor employees were to be deployed to military bases, that definitely should have been covered in the solicitation. This is a real gap. Was it patent or latent? I don't know. What does the government want to accomplish here? When did it determine its objectives? If I'm the contractor, I'm going to tell the contracting officer that my contract has been changed, and I want an equitable adjustment. Not for the cheap facilities, but for compensating my employees for the inconvenience.

Thank you!

Assume progress payments based on costs incurred to be liquidated as units of production are delivered and accepted.

Normally, when I think FPIF, I think "contractor overrun" -- but here's a new one (for me): the contractor is actually significantly underrunning because of unexpected production efficiencies realized during the multi-year procurement (for production, not services). The contractor is worried because it believes that the CLINs are now over-priced. As it delivers, it's billing more than will be the case when the Incentive Fee formula is used to determine the final price. That's a great situation from a cash flow perspective, but not so much from a revenue recognition perspective. The contractor is convinced that, at the final Incentive Fee reckoning, it will have to send its government customer a Very Large check, which it would very much rather not do, even though it means that the government is basically giving it a nice, interest-free, loan at the moment. Instead, the contractor would like to reprice CLINs to recognize the underrun. However, the contracting officer is reluctant. Is there something I should know to understand why repricing CLINs on an FPIF contract -- to recognize an underrun and to prevent what could be perceived as an over-billing -- is not favored? Thank you.