here_2_help

Serious question: Assuming that adequate competition is obtained, the contractor T.O. proposals would not be subject to TINA, correct? Second question: Who pays for the proposal prep costs?

Yes. Yes we can. The system does not appear to require use of expensive attorneys, at least on the front end. I like that.

I apologize if this post is not responsive to Vern's question. I don't work in the government, only ever the private sector (contractors). It used to be the case that a degree inferred some ability to write and to critically think and to perform analysis. Not so much any more. Are those skills important for an 1102 position? Not for me to say. I will say that my first "real" job after completing college with a B.A. -- a liberal arts degree -- was at a large defense contractor. I was immediately interested in the subject of government contracting, and took classes at night in UCLA's Government Contracts Certificate program. One of my first classes was Cost/Price Analysis -- thought to be the hardest class in the series but I didn't know that when I enrolled. My point is: it wasn't hard. Not at all. It was just algebra and analysis. After my college coursework (again: liberal arts) I found the work easy and skated through the class; I didn't understand why my classmates struggled so. Then I found out that several didn't have college degrees and were trying to apply the high school algebra they'd learned years before and had mostly forgotten. Of course, this was decades ago and things have changed since then. I don't think I have any liberal arts folks on my staff; they are almost all Finance/Accounting types. They can run rings around me on a spreadsheet. But critical thinking and analysis? Missing in action.

My comment? Sarcasm.

Well, gentlemen, aren't we chipper today? I'm over here, applauding the folks who manage to get the job done within a system that would make Kafka weep.

I'll add to Vern's informative link with a caution that many contracting officers do not fully understand how to deal with unpopulated JVs. Nor do many contractors that form them! Questions to be answered ahead of time: 1. Which entity will do the accounting for the JV? Is that entity going to be submitting invoices on behalf of the JV? Does that entity have an adequate accounting system? 2. If the "subcontractors" to the JV are going to receive cost-type contracts, do they all have adequate accounting systems? 3. Does each "subcontractor" to the JV have the ability to calculate allowable indirect cost rates and to issue credible cost proposals suitable for negotiation? 4. How will profit be distributed to the JV members? How will any unallowable costs, incurred on behalf of the JV (rather than an individual member), be accounted for? I could go on. These issues, and others, should be sorted ahead of time so that the proposal can clearly explain to the government how it's all going to work.

If you require proposals in order to issue a TO, you should be prepared to pay for them. Having the ktr put the proposal prep costs in G&A shifts the costs to other customers who get no benefit from your ID/IQ. Also see CAS 402, Interpretation No. 1, quoted below: (Emphasis added, obviously.)

A recent COFC opinion offered what I thought to be a rather unique definition of a contractor's standard recordkeeping system for purposes of determining the amount of money owed during a Term for Convenience of a commercial item/service contract. I had always believed that the above bolded phrase was intended to distinguish the systems of commercial entities from the systems of traditional government contractors, who invest in developing government-unique systems (including accounting systems) to meet the myriad of requirements for contracts awarded outside of Part 12 procedures. Silly me. In fact, as the Judge noted, the plaintiff had an accounting system (Quickbooks). Apparently, the plaintiff failed to show the Judge how its system was used to track costs. Anyway, I thought this opinion was ... interesting. I would have thought that Quickbooks would have been sufficient for a commercial item/service contractor.

Thought I would close the loop on this. Upon further discussion, it turns out that "Legal" didn't say. It was a policy position from the Chief. The Chief prefers cost-type contracts because ... why? I don't know. We were willing to go FFP and take the cost risk. Anyway, Legal didn't say. The Chief did.

Yes, I have published many articles in the past. I think I published four on Cost, Price & Accounting Report over the years. I write fewer now, to be honest. Vern is right, I need to do more.

We're not that far apart, Vern. There is a (small) audience for in-depth discussions and analyses, sure. They want what you write but they can't afford to subscribe. (And thank you for often making your articles available to the public.) But it's hard to publish in-depth articles when NCMA's membership covers a wide spectrum of folks, from state/local government buyers to prime contract buyers to commercial buyers. For example, I was just speaking with somebody who's planning to join NCMA in a few weeks or months; she's a buyer for the local school district. She's not looking for--nor is she ready for--a deep dive into, say, FAR Subpart 15.4. In my view, Contract Management aims for a low common denominator that will be of general interest to the majority of its readers. I quote from current Editorial Guidelines below regarding what the Editors are looking for.

True but, in fairness, the audience is not there for in-depth analysis.

First of all, yes. The prime can ask you to bill less than you actually incur. (This assumes that you actually incur $102.31/hour for your employee's labor. See ji20874's post.) You don't have to agree, but the prime can ask. Second, if you were CAS-covered I would say that you have to be consistent in your cost accounting practices. Labor over there must be treated as labor everywhere. But you're not CAS-covered. Are there burdening differences between labor & ODC? I don't know your accounting system so I couldn't say. But if the transformation from labor to ODC changes the burdening, and your are required by 52.216-7 to submit a final billing rate proposal at the end of the year, then you may have an argument as to why that's a bad idea. I would suggest you get a consultant in to assist you with these types of questions ...

If you are a small business then no, you are not subject to CAS. So your prime is asking you to (a) request less reimbursement than actual costs incurred, and (b) to treat the additional labor as an ODC? (And burden the labor as an ODC instead of as labor, I assume.) Is that correct? Back to Vern's question then. What do you want to know?

Contractor500, is your company subject to CAS? Is the subcontract subject to CAS?

I have attended several NCMA conferences in the past, including a few World Congresses, where I was a presenter. I have attended NCMA National Education Symposia--and even instructed at one of them. I don't recall with absolute certainty if I've specifically attended a GCMS -- but I think I have (once). NCMA is a good organization--especially for people new to the field. That being said, I let my membership lapse several years ago (after being a member for ~ 20 years). Consequently, I no longer attend NCMA events. I can't speak for other WIFCONites, but the event may be worthwhile for YOU if you are new(er) to the field. No. I think interaction with decision-makers is limited, especially for attendees. The speakers are there to represent their agencies and the Federal government; they don't really have a lot of space to "let their hair down" and interact, assuming they wanted to. In my experience, the best way to get good one-on-one interaction is to be a speaker yourself and hang out in the green room.

When this issue comes up for companies have have supported, we typically turn to 31.205-6(h). (Emphasis added.) So, no. Contractors do not automatically get to claim reimbursement of underpaid wages via submission of an REA, because the compensation costs are unallowable in most circumstances. I guess we can split hairs about what "negotiated settlement means" in this context but, in my experience, the phrase refers to a negotiated legal settlement--an interpretation that is supported by the other two circumstances in that same sentence.

Vern is correct. If the company treats the situation as a contract between affiliated entities, then that's what it is. It is a buy. If the company treats the situation as an interorganizational transfer then no contract is necessary as it's a make. See FAR 15.401 Definitions, as well as FAR 15.407-2(b) Definition.

DCAA already does a lot of data analytics. Or at least the agency tries to. Results have been ... mixed. To my knowledge, nobody has tried to use data analytics on an individual contract (kind of defeats the notion of "big data"). On the other hand, as I noted, compensation is likely to be a cross-cutting issue well suited for ACO or DACO/CACO adjudication.

Interesting question. Most larger contractors have one or more ACOs, DACOs, and perhaps even a CACO. You'd like to think that compensation, likely being cross-cutting across multiple contracts, would be something addressed at a level higher than a PCO. On the other hand, see this DoD IG audit report, or perhaps this DCMA Manual at 3.7.d.

The thing is that DCAA auditors do not have the training, experience, or judgment to evaluate the reasonableness of contractors' compensation levels. See, for example, the appeal of J.F. Taylor at the ASBCA. Or the appeal of Metron. The auditors try but they (generally) cannot put together supportable positions. Which puts the responsibility back on the CO's shoulders--rightly or wrongly.

I agree that TINA does not require you to provide certified cost and pricing data. However, that's not the same thing as providing non-certified cost information necessary for the prime to assure price reasonableness of your rates. If you're going to use foreign workers then your fringe benefit model for them will be entirely different--if you applied the same fringe rate to their labor, you'd (potentially) be making a windfall profit. The prime has a responsibility to assure itself (and its customer) that's not happening. To your questions: 1. Yes, you can try. But what if the prime declines? What then? 2. Maybe but what if the PO prices include inter-company profit? Now you are pyramiding profit. How to you show your prime that's not happening? Good luck.

I deduce from your posts that you work at a small(er) contractor. I'll guess you're the contracts person, and are being asked to do things not found in the NCMA CMBOK. Good luck. Even if I'm wrong about you and your role, good luck.

DCMA Legal

I have used the rate of applicant turn-downs (i.e., the ratio of offers made to offers accepted) to show government auditors why we needed to jump the pay rate for certain positions. I should say that I have "tried" to use the ratio, because I have had mixed success in doing so. Generally speaking, most government folks are used to OPM scales/locality pay rates and have trouble accepting that contractor pay doesn't really work that same way.