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here_2_help

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  1. An incisive article. Opinion backed by research and fact, as I've come to expect from Vern.

    I would add my opinion that revising the acquisition process without revising the budgetary process at the same time seems doomed to failure. Unlike Vern, I don't have any research and facts to support my opinion. Yet it remains my opinion, based on working in this government contracting world for 40 years now.

  2. I read Mark's LinkedIn OP. He's a smart guy. But he's also very opinionated and not at all shy about sharing his opinions. (I routinely receive similar feedback but, then again, I didn't post what he did on LinkedIn.)

    My take on his assertion was "meh." I don't think it really matters all that much, nor does knowing the "acquisition chronological order" of the FAR Parts aid in finding what one might need to find. In that vein, I agree with dacaan regarding the "so what".

    I teach the FAR (using Vern's amazing hands-on method) and we have never, ever, needed to map the various FAR Parts to the acquisition lifecycle. If that's important info for somebody, then good for them. The entire assertion strikes me as "interesting, if correct, but I have better things to think about."

  3. 16 hours ago, C Culham said:

    Yes, my response was not complete with regard to this matter.   Taking the easy way out by providing this reference to a thread I recalled.  It might help you do further research and thinking about "closed".

     

    Dang, but that was a helpful thread! I miss Vern's input so much ... and trust that he's doing well (physically) these days.

  4. 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. 

  5. 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!

  6. 17 hours ago, Neil Roberts said:

    My understanding is that a Contract Disputes Act proceeding normally may be available after the contractor submits a formal claim seeking a contracting officer's final decision and the contracting officer issues such a final decision. Scratching my head about the contractor's claim here to the contracting officer.

    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.

  7. 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.

  8. 4 hours ago, ArrieS said:

     

    Next they will have a second CLIN which will be informational which will be the informational CLIN that funding will be applied to. 

    They are just using the first CLIN 0001 for tracking and will reduce the total cost of CLIN 0001 by the funding applied by the priced SLINs to CLIN 0002.

    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.

  9. 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.

  10. 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.

  11. On 10/13/2023 at 11:33 AM, ReadTheContract848 said:

    Hi all,

    How would you determine the applicability of the JTR to a Contract? I understand the Introduction of the JTR specifically states it does not apply to "Contractor employees under a DoD contract for anything other than personal services". However, most contracts say something along the lines of the JTR applying. Then FAR 31.205-46 mentions the JTR to set the basis for the maximum per diem rates. 

    In this specific scenario, here are the facts:

    1. The contract says "Travel and per diem costs shall be consistent with the JTR"

    2. The contract also says "Housing and other logistical support will be provided by the Gov't in support of deployments in accordance with CCMD guidelines." The guidelines provided by the Gov't have no additional details on requirements for travel

    3. The Government's position is that by the two statements above, it's acceptable to require Contractors to stay in dorms (4 person/dorm, sharing with service members), and receive the Government Meal Rate (GMR) in accordance with JTR Table 2-17

    4. The Contractor's position is that Table 2-17 GMR only applies to service members, and that in general the JTR is applicable to set maximum per diem rates, not including these reduced type rates

    5. The Government believes reimbursing the full per diem and paying for lodging would not be reasonable. The Contractor believes forcing a Contractor to stay in a dorm and eat at the DFAC is unreasonable

    6. In the RFP the Gov't provided plug numbers so the proposal did not address this

    7. This is a CPFF contract

    8. The Contractor's policy is they pay employees the per diem rates (versus actual costs).

    What else should be considered? What language takes precedence (ie JTR saying it does not apply versus contract saying to be consistent with JTR). Is there anything about providing contractors "adequate" housing?

     

     

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

  12. 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.

  13. 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.

  14. The heart of the question seems to be the type of subcontract(s) that the prime will award. Will they also be FFP with a separate cost-reimbursable travel CLIN? It is not necessary that the subcontract type must match the prime contract type.

    For example, a subcontractor can receive a FFP subcontract and then it won't matter what its own travel costs are because there will be an invoice that says "subcontractor costs" with no further breakdown. We don't know if that will be the case, but it could be. Thus, the correct answer depends on the type of subcontract awarded.

    From a purely competitive standpoint, having the subKs each bid their own travel costs increases the proposed price, even if those costs show up as "subcontractor costs" not travel. Why would you do that in a competitive acquisition?

  15. 15 hours ago, joel hoffman said:

    Assuming that there is “no authority” to direct an action that you expect will cost more money, how about thinking outside the box… The KO could CALL the contractor and ASK IF they could delay shipping the products during the shutdown and then assess the response as to whether it would cost more. It might not. 

    Key discussion points being:

    - If the contractor delivers the customer may not be available to perform inspection and acceptance

    - If the contractor delivers and obtains acceptance, there may be no staff in the payment office to process the invoice

  16. The topic title asks "how to T4D a micropurchase." Not T4C. Terminate for Default. That was the premise.

    In what way did the vendor fail to perform -- especially if 20% of the acquired services have been delivered?

    We're talking about $10,000 here, right?

    Let it go, man -- unless you feel the Government has been defrauded in some way. In which case, refer it to the appropriate authorities for action.

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