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Everything posted by here_2_help

  1. Not much harder in the world of government contract cost accounting than dealing with pensions. CAS 412 and 413 are ... challenging. To say the least.
  2. There is no restriction on contractor work hours. However, there may be a restriction on reimbursing the cost of those hours. For example, 52.222-2 may limit payment of overtime premiums. There may also be concerns with uncompensated overtime worked by salaried, exempt, personnel (see 52.237-10). Generally speaking, the government should not want to manage how the contractor performs its efforts.
  3. (Emphasis added.) Well, that's absolutely not correct in the slightest. See, for example, 52.216-7(g). Or 52.215-20(a)(2). Or 52.230-2(c) -- when applicable. Shrug. Somebody's stretching hard to support a weak position, and I suspect that position will not prevail if tested. But whatever. I'll add that, if I were a government auditor and somebody told me I couldn't perform an audit that a contracting officer had requested me to perform, my first thought would be to wonder what the contractor was hiding.
  4. In my view, Vern is correct. The Class Deviation does not exempt the contract from the requirements of 52.216-7. The contractor must prepare and submit a timely proposal to establish final billing rates (commonly called an "incurred cost" proposal). The good news is, if that this is the only cost-reimbursement government contract the contractor has, the chances that DCAA will audit it are relatively slight. DCAA uses a "risk-based" approach for determining which contractor proposals to audit, and this situation will likely qualify as being "low-risk" to the government. Accordingly, I would expect DCAA to review the proposal for mathematical accuracy and completeness, and then issue a memo to the CO recommending that the final billing rates be established as submitted. (I assume the contractor has an adequate accounting system.) Even if DCAA decides to perform an audit, it's not the end of the world. If the final billing rate proposal was done well, with support available from the accounting system, there really isn't much to worry about. If, however, the contractor doesn't have a solid indirect rate structure and a decent accounting system, that might be another matter entirely. If that is the case, the contractor really had no business accepting a CPFF contract award in the first place, nor should the government have awarded it.
  5. Maybe I'm out of line here (if so, tell me) but, in private industry, an cost/benefit analysis is sometimes made before modifying an existing contract and asking for consideration in return. In the government procurement environment, typically there are many sellers and only one buyer (monopsony). In the private sector, there may be only one (or a very few sources)--and letting the bargain originally made run its course may not be in the buyer's best interests if it results in non-performance by the seller. It may be difficult (or impossible) to find a replacement supplier and, at a minimum, doing so would disrupt program schedules. For example, in the global financial meltdown of 2008 - 2010, many Airbus suppliers were simply unable to perform to the terms of the original bargain. As a result, Airbus modified existing contracts (without consideration, as I recall) and did what it had to do in order to keep its qualified suppliers financially viable. I did a quick search, looking for support for my memory of the situation, and found this 2011 report. I recall there were several such actions taken; more frequently Airbus modified existing contracts to accelerate supplier cash flow and to increase contract prices. The consideration, if you will, was that Airbus could keep its aircraft programs on schedule and did not have to find and qualify and train new suppliers to replace the ones that went bankrupt. Just throwing this out here, because I think the different approaches are interesting to compare/contrast.
  6. Vern's addendum pulls no punches, as has become the norm for him. I can only hope that somebody with the power to change things is reading his words.
  7. So many questions here come from contracting folks who inherit messes and want assistance in finding their way out! Who holds people accountable for creating those messes in the first place? Nobody, as far as I can tell.
  8. I hear you! All I can say is that when employees deploy to Forward Operating Bases (FOBs) under LOGCAP or similar contracts, the contract pays for their travel time from home to the FOB. Sometimes that may involve multiple days of travel, depending on where the FOB is located and when the convoy is scheduled. Depending on contract terms and the employee's status under FLSA, that also may involve paying overtime. So -- again, for whatever it's worth to set your mind at ease -- there is definitely lots of precedent for the government paying travel labor hours.
  9. So much I don't know here! But ... Contractor employees (typically) fill out time cards recording their hours worked during the day and week. They must account for all work hours, accurately, under penalty of law for any intentional misstatements. If you don't want them to record their hours to your contract when they travel on behalf of your contract, then where would you have those hours go? Overhead? If they go to overhead, then all customers pay for your travel hours. That's not to say that you need to pay for those hours. As Vern said, that's negotiable. But if the hours are charged to the contract and are not billable under contract terms (e.g., Section H clause), then you are in actuality taking profit away from the contractor, because the contractor has costs that it cannot bill. Is that situation fair and/or reasonable? You can make the contractor whole by agreeing to a higher fixed fee (to cover those non-reimbursable costs). That could be an option. Or you can sigh and agree that when the contractor employees travel to benefit the contract, then the contract should pay for their time. Just some things to consider.
  10. Is the travel taking place during normal work hours?
  11. When I (a contractor) and the government cannot reach agreement on an FPRA, I use my FPRP rates as my bid rates. The government counters with its FPRR rates. Often, negotiations are challenging because, if we could have reached agreement earlier, I would already have an FPRA. You are negotiated estimated contract cost. Actual allowable costs will be actual costs and will be billed, sooner or later (see 52.216-7). Insistence on using rates that are lower than the contractor expects generally leads to a request for additional funding IAW 52.232-20 or -22. If you want to check the validity of the contractor's position, ask for an analysis that compares FPRP rates submitted versus actual costs submitted in the certified final billing rate proposal for the past three years. If the contractor is not accurately forecasting future costs, you can use the FPPR rates with confidence. However, if the contractor shows a good track record in being able to forecast future costs (and associated indirect rates), then you may want to believe it this time around.
  12. 45.104 Responsibility and liability for Government property. (a) Generally, contractors are not held liable for loss of Government property under the following types of contracts: (1) Cost-reimbursement contracts. (2) Time-and-material contracts. (3) Labor-hour contracts. (4) Fixed-price contracts awarded on the basis of submission of certified cost or pricing data. (b) The contracting officer may revoke the Government’s assumption of risk when the property administrator determines that the contractor’s property management practices are noncompliant with contract requirements. (c) A prime contractor that provides Government property to a subcontractor shall not be relieved of any responsibility to the Government that the prime contractor may have under the terms of the prime contract. (d) With respect to loss of Government property, the contracting officer, in consultation with the property administrator, shall determine- (1) The extent, if any, of contractor liability based upon the amount of damages corresponding to the associated property loss; and (2) The appropriate form and method of Government recovery (may include repair, replacement, or other restitution). (e) Any monies received as financial restitution shall be credited to the Treasury of the United States as miscellaneous receipts, unless otherwise authorized by statute ( 31 U.S.C. 3302(b)).
  13. Sure, but my copy is suitable for putting on a bookshelf in a CMO
  14. In related news, I have a copy of the ASPR Manual for Contract Pricing, dated 1975, that's available if somebody wants it. I've had it for years, and never once used it. Message me if interested.
  15. In this scenario, would the contractor be required to have an approved Property Management System IAW 252.245-7003? If so, should that have been an evaluation factor (or maybe a responsibility factor) in the original competition for award? If the contractor is required to develop an adequate System in order to properly track government-issued laptops, and assuming there is no other contract that requires an adequate tracking system, would the CO be willing to pay for that effort as a direct contract cost? Bottom-line is that telling the contractor to track the laptops carries with that direction the possibility that there will be an increased cost of performance. I would hope the IGCE included that "hidden" cost in its estimate.
  16. Spot on, Vern, but I feel as if you're shouting into the abyss.
  17. Thanks Bob! Designing and building a nuclear powered vessel (tempted to type wessel) is such a challenge -- and the successful completion of an important milestone is worth noting.
  18. Absolutely spot on observation. I recall discussing the "human capital crisis" circa 2006/2007. At the time, I was quoted in Aviation Week. Doesn't matter. When there is no accountability for the lack of problem-solving then, as Kenan Thompson famously said on Saturday Night Live, "ain't nothing gonna happen."
  19. Oftentimes I found a subsidy requirement, where losses were subsidized ... just to reduce any incentive to cut staff or food quality in order to increase profits. In fact, for one contractor, substantially all the profit came from tax credits generated by the work and the people hired. The work was surprisingly complex. (At least, I was surprised.) This is actually a commercial service. It should be treated as such.
  20. I dunno. But I do know that the US Government acquires food services from contractors on a routine basis. I recall visiting a Pentagon cafeteria, back in the day, so I could interview the cafeteria operator. In fact, I interviewed several cafeteria operators, not just at DoD facilities but at civilian agency facilities as well as in private industry. Yes, this was a while ago, but NOBODY was under an ID/IQ contract. Why this particular "food service facility" contract would need to be structured in a manner that is unlike the standard approach is but one of the mysteries associated with this question.
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