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Posts posted by here_2_help

  1. Thanks, Jamaal, for your comment. It was thought-provoking and led me to some additional research.


    Technically, an IDIQ contract is only a contract to the extent that the work is completely priced and can be unilaterally ordered by the government. To the extent that the IDIQ contract contemplates newly priced offers to perform additional tasks, such work is not part of the originally awarded contract, but is more in the nature of a basic ordering agreement.

    Source: Accounting for Government Contracts: The Cost Accounting Standards (LexisNexis) at 3.03[5][a].

    Food for thought, huh?

  2. On 6/1/2023 at 2:46 PM, Michelle Adams said:

    I am having difficulty finding firm information around whether a CAS determination is applied at the IDIQ level (which is a $0 award) or at the individual Task Order level.  I've found a lot of opinions going both ways but does anyone have any regulatory information around this OR case support one way or the other?   Thank you

    It's unclear to me what you mean by "CAS determination." Do you mean a determination regarding CAS coverage? I.e., are you asking whether CAS coverage is determined at the ID/IQ level or at the individual order level? I'm afraid there is very little in the way of regulatory language or case law to help you with this one. As Don pointed out, the FAR Council says CAS coverage is determined at the contract level but that is a silly position, since both TINA coverage and Limitation of Cost/Limitation of Funds requirements are applied at the order level. It's just silly to have a different approach for CAS coverage; but that's what the FAR Council asserted was the case.

    I think your statement that an ID/IQ is a "$0 award" is not exactly correct. First of all, there's a guaranteed minimum, right? Second of all, there's a ceiling amount. Finally -- and in my view this is an important data point -- there is the Government estimate regarding how much $ will be awarded to the contractor or contractors. Maybe there's an IGE somewhere. Those might assist you.

    But there's almost nothing firm you can rely on. This is has been a known issue for almost 30 years yet the CAS Board has declined to address it. So you are on your own, unfortunately.

  3. I've seen it done before.

    There is little argument that the prime contractor is responsible for its subcontracting, including choosing the appropriate subcontract type and flowing down all applicable prime contract clauses. FAR 44.303 identifies 11 things the government looks for when it assesses a contractor's purchasing system. In addition FAR 44.202-2(a) lists 13 things the contracting officer should evaluate with considering whether or not to give consent to a subcontract. Unless award of a commercial item subcontract violates one of those 24 items, there is no prohibition on awarding it, regardless of prime contract type.

  4. I started my career in what is now called "EVMS" but which was then called "C/SCSC" (aka "Two-and-a-half Chicken Shits"). Using EVM and related tools to predict an at-completion variance is not a bad idea, though the at-completion value is never as precise as advocates want you to believe it is.

    But all the variance analysis a formal EVM system requires is simply a big waste of time. As somebody once told me, it's like steering a boat by focusing on the wake.

  5. One of my pet peeves in this area is the set of indirect rates to be used for forecasting the At-Completion variance from the estimated cost budget when an FPRA is in place. Many government folks expect the contractor to use its FPRA rates; after all, that's what the parties agreed to for estimates of future costs, right?

    Not in my opinion. In my view, the contractor should use its current indirect cost estimates--which could be its FPRP rates or something even more current--to project its to-go costs. Often, FPRA rates are decremented as part of negotiations, which renders them (potentially) inaccurate. The At-Completion variance should be as accurately calculated as is feasible.

    Since we argue about which set of indirect rates to use, you can safely infer that my clients are encouraged to provide their government customers with as detailed an estimate as they can feasibly provide, because they are asking for more money than planned and it is only reasonable to expect an explanation of what happened and why, as well as a justification for the amount of additional funds now required.

    Just throwing "1 number" at the customer is not a winning success strategy, in my experience.

  6. 54 minutes ago, Guest108830 said:

    Remember, it's the Contractor that believes the addition of this 11th person would greatly benefit the effort due to his superior skillset with a piece of software. Contractor seeks to insert his skillset (in a fulltime capacity) within the existing scope and still keep all existing full time individuals. 

    I apologize. I said I was done with this discussion but here I am again. Shrug.

    I have seen the scenario quoted above many times in my career. The contractor believes it is smarter than the government and wants to innovate unofficially and without the mess of a contract modification. Adding another person who was not contemplated at the time of contract formation and price agreement must make sense, right? At least from a technical perspective. 

    The perspective ignores the agreement struck between the parties.

    If the contractor wants to add another FTE (and associated labor hours) then Vern's post of an hour ago is the way to do so. Doing so unofficially is going to lead to all the problems already mentioned in this thread.

    Again, I bow out unless a comment is specifically directed to me. I will attempt to stay "bowed-out" this time.

  7. 38 minutes ago, Guest108830 said:

    H2H. In a CPFF (Term), the parties are contracting for hours, not dollars. The dollars may or may not surpass the estimate, even with the additional .5 FTE. The dollar situation is fairly straightforward.

    The focus is on the hours and the Contractor required to deliver a certain number of hours over a given timeframe. Contractor will only be able to provide the contracted hours up to a certain point. In any event, Contractor will not be able to reach the end of the current PoP as it will run out of hours.  (Cost) underruns and (cost) overruns are relevant as to the dollars, not hours. Once the hour situation is addressed, the money will follow suit as appropriate. 

    Well, if this was a FFP-LOE contract I would 100% agree with you. However, this is a CPFF LOE-Term contract, so there is no way to avoid compliance with the LoF / LoC clauses, to my way of thinking.

    To be more explicit, in a Cost-Type contract, the labor hours and dollars are integrated. You say the customer is buying hours but there is also an estimated cost (and fixed fee) inextricably associated with those labor hours.

    As I basically agree with your conclusion (a mod is required or else the contractor stops work or else the contractor continues to perform without remuneration) I will say no more.

  8. 22 hours ago, Guest108830 said:

    Under CPFF (Term / LOE), Contractor has 10 persons direct charging. Assume 1920 hours per calendar year = total 19,200 hours per year. Assume PoP is the same, Jan 1 - Dec 31. Contractor seeks to add an 11th person six months into the PoP and receives no objection from the Gov't (KO and COR) in doing so. 

    If Contractor brings this 11th person on board, Contractor would be providing more hours to the Gov't than originally planned and the hours the Parties have contracted for (e.g., Contractor obligated to devote the specified level of effort for the stated time period per FAR 16.306(d)(2)).  

    Does Contractor:

    1. ask for a mod from the Gov't to increase the hours and if granted, bring the 11th person on board? And if not granted, don't bring the 11th person on board?

    2. what happens when the Contractor runs out of hours before reaching the end of its PoP - then what? [Shouldn't be able to exercise the next OY early and have overlap of Base and OY for a month as that would conceivably violate FAR 17.207(f) (e.g., Options exercised in strict accordance with the terms, considered out of scope).] 

    3. If the Gov't "accepts" the work of Contractor, including the 11th person (e.g., Gov't begins using the new / updated programming code), wouldn't the Gov't be required to compensate the Contractor for the accepted work irrespective of the hours?


    16.306 Cost-plus-fixed-fee contracts.


    (d) Completion and term forms. A cost-plus-fixed-fee contract may take one of two basic forms-completion or term.


    (2) The term form describes the scope of work in general terms and obligates the contractor to devote a specified level of effort for a stated time period. Under this form, if the performance is considered satisfactory by the Government, the fixed fee is payable at the expiration of the agreed-upon period, upon contractor statement that the level of effort specified in the contract has been expended in performing the contract work. Renewal for further periods of performance is a new acquisition that involves new cost and fee arrangements.


    (4) The term form shall not be used unless the contractor is obligated by the contract to provide a specific level of effort within a definite time period.

    1. Contractor has a CPFF LOE Term contract with an estimated cost agreed-upon based on 10 FTEs for one year (19,200 labor hours). By terms of the contract, the contractor must deliver all LOE hours within the estimated cost, or else notify the customer of a potential overrun IAW 52.232-20 or 52.232-22 (as applicable).

    2. Contractor plans to add an additional 0.5 FTE (halfway through the Period of Performance). As a result, the contractor will deliver more labor hours than the parties originally contemplated (20,160 hours vs. 19,200). However, the additional hours come at an additional cost. Because the contractor will incur more labor hours than budgeted, it will burn through its funding faster, likely triggering the 52.232-20 / 52.232-22 notification.

    3. Upon receipt of the contractor's notification, the contracting officer must decide whether or not to provide more funds. If more funds are provided, then a modification to the existing contract will need to be made. The customer will be compensating the contractor for the additional 0.5 FTE (presumably because value was received). If no additional funds are provided, then the contract will be completed earlier than the parties anticipated. Work will stop until the next option year is exercised (if it is exercised).

    That's how I see the situation, anyway.

  9. On 7/25/2022 at 6:08 AM, HitTheNutz said:

    Assumptions: (1) Contractor has only one contract; (2) Contract is a SBIR contract valued at less than $7.5M and is the CPFF type; (3) SBIR contract contains the clauses at at FAR 52.216-7 and 52.215-2.  Class Deviation Memorandum 2018-O0009 labeled “Pilot Program for Streamlining Awards for Innovative Technology Projects” states the following: "In addition, contracts, subcontracts, and modifications of contracts or subcontracts valued at less than $7.5 million awarded to a small business concern ... pursuant to ... the Small Business Innovation Research Program are exempt from the requirements for audit and records examination under the clause at FAR 52.215-2, Audit and Records-Negotiations."

    Question 1: What takes precedence?  (A) If the SBIR contract contains the clause at FAR 52.215-2, does the contract term take precedence and apply? OR (B) If the SBIR contract contains the clause at FAR 52.215-2, does the class deviation memo take precedence and exempt them from the contact clause?

    Question 2: At year end, does the contractor have to submit an incurred cost submission (ICS) related to this contract? If so, would that ICS be auditable by DCAA (i.e., could the contractor claim that the ICS is not auditable by DCAA because they are exempt from FAR 52.215-2)?

    Restating my position(s):

    1. You don't provide the contract award date (or effective date if not the award date) so there is no way to tell whether the contract was awarded before or after the Class Deviation was issued and took effect. If the contract was awarded before the Class Deviation took effect, then the contract language controls. If the contract was awarded after the Class Deviation was issued, the contract language still controls--unless somebody wants to argue the point in court. If you think the clause doesn't belong in the contract, because of the Class Deviation, you should request it to be removed via contract mod.

    2. Yes, because the contract contain 52.216-7 and that clause requires submission. Inclusion (or not) of 52.215-2 does not trump the requirements of 52.216-7. In point of fact, though, DCAA rarely audits the ICS submitted by small businesses, because there's typically not much recovery for audit hours expended. DCAA calls this "risk-based" auditing.


    From the link provided by HitTheNutz:


    However, this guidance and DCAA interpretation fails to consider the FAR 52.216-7, Allowable Cost and Payment clause. The process outlined in FAR 52.216-7 clause requires the Contractor to invoice with provisional billing rates and then prepare an Incurred Cost Proposal for each fiscal year a cost reimbursable type contract has incurred costs. The Incurred Cost Proposal is subject to audit and is critical in the contract closeout process for cost reimbursable contracts. This audit of the Incurred Cost Proposal ensures that unallowable costs are not claimed as well as the costs incurred are accurate, reasonable, and allocable. DCAA typically reviews the Incurred Cost Proposal to determine if it is “adequate for audit” and then eithers audits or provides a low-risk memo to Contractors.


  10. I would add to C Culham's comment that IAW 52.232-20(c), the contractor should have provided the CO with the amount of additional funds necessary to complete the work. The CO can accept that amount or not, but there should be no reason to have the contractor continue to work without providing additional funding. To do so effectively defeats the purpose of the clause's advance notification requirement, which is to provide the customer with sufficient time to find the finds or to decide to tell the contractor no further funds will be forthcoming.

  11. Linda Y -- would you say the days of travel or the activities involved are severable between the two different contract PWS's? Can the contractor feasibly "split" time and expenses between the two contracts? If so, what would the basis be?



    Related question. Other than travel, are their any contractor activities that might generate costs past the end of the first contract's PoP? For example, are there any subcontractors whose costs, incurred for activities within the PoP, will be recorded by the prime contractor after the end of the PoP? (This is entirely normal, by the way.) If so, how will those costs be handled?

    If this is a cost-type contract and the contractor settles its final billing rates related to the years of contract performance, and wishes to submit an additional invoice for its "final" billing rates (IAW 52.216-7) -- how will those costs be treated?

  12. I have much to say, most of which I will keep to myself--because this is the Beginner's Forum and no place for a technical discussion of allocability. I will offer the observation that nobody has yet asked the most obvious question -- under which contract were the travel costs proposed and priced?

    Another related question: Assume there was no follow-on contract. Would the travel costs have been the same? If not, why not? What is changing based on the introduction of a new contract (final cost objective)? What event(s) drive the change?

    Direct cost allocation determinations are surprisingly hard.

  13. 1 hour ago, bob7947 said:

    Maybe experience is a detriment.  What do you think?

    Relations between the F-35 Joint Program Office and the prime contractor, Lockheed Martin, have been (in the past) problematic. Maybe she was tainted by that troubled relationship? Maybe Lockheed Martin folks whispered in the ears of Administration officials? Maybe in her dealings with the multiple military services that are customers of the F-35 program, she upset somebody in another service, or even within her own service? 

    To answer your question, though: yes. It can be.

    "Experience is what you get when you didn't get what you wanted." -- Randy Pausch


  14. From today's main page, a protest decision at the Court of Federal Claims, decided for the protestor.


    While the agency appears to have conducted a rational price reasonableness analysis, as is explained below, its price realism analysis was not conducted in a rational manner.

    The agency’s price realism analysis, at least as documented in the administrative record, essentially consisted of a set of conclusory and repetitive statements with very little explanation or documentation of what, if anything, was actually done to complete this requirement. For instance, the price evaluation section of the source selection decision, which intermixes both the reasonableness and realism components, states that “[i]n conducting the price evaluation, the government assessed the price quotation to ensure the proposed pricing is realistic for the work to be performed, reflects a clear understanding of the requirements, and is consistent with the various elements of the other parts of the quotation.” AR 489. Fair enough, but this statement simply restates the requirements of the price realism analysis the agency committed itself to conduct and then, in conclusory fashion, states the agency did in fact conduct such an analysis. The analysis then reiterates this same conclusion, that “[t]he Government took no exceptions or issues to the Offerors’ proposed pricing and found all three to be realistic for the work to be performed. Additionally, all three Offerors reflect a clear understanding of the requirements.” Id. The Court is left to wonder where the actual analysis is.

    Although the government was not required to perform a cost realism analysis for this fixed-price award, it committed to do so. 

    Request for injunction granted.

  15. Smallbusiness, look at the situation this way.

    The costs in question were properly charged as direct contract costs at the time. Because you didn't comply with your LoC/LoF clause(s), the customer is not obligated to pay for them. Right? In essence, the costs have become unallowable via your noncompliance with the contract clause(s).

    Now you ask whether you can move the unallowable direct costs to indirect and recover them as allowable indirect costs.

    What do you think your auditor(s) are going to say about that? Do you think they'll be okay with that?

    Now, there is a slight chance of keeping the costs as direct costs and recovering them, if the costs are (as you describe them) COVID PTO costs. There is a lot of DOD guidance on reimbursement of such costs. Have you read the guidance? In essence--at the CO's discretion--the costs may be reimbursed. May be being the operative phrase.

  16. 49 minutes ago, Needforspeed said:

    These are great questions.

    Can you clarify what you mean on question 2? For question 3, are you referring to something above and beyond the accounting system - does Sharepoint qualify as a database? Or something like an Access database? If you could expand on what a relational database is to you that would help.

    Question 2 -- Each prime contract (or subcontract) you are awarded has a "contract number". You should include it. Each of your project numbers should have a link to the contract (or subcontract) that was awarded to your company.

    Question 3 -- Sharepoint, from what I understand, is a web-based document management and storage system. Basically, it's a 21st Century filing cabinet. Is that what you want? Or do you want something like OnBase, which is "a single enterprise information platform for managing content, processes, and cases, combining ECM, case management, business process management (BPM), records management and capture functionality". (Not a recommendation, just an example.) My thought is that contract management (and subcontract management) is a dynamic process. You are managing mods, funding changes, and other fun things. Where are you managing all that stuff and the workflow(s) associated with them?

  17. You're with a contractor, right?

    My thoughts:

    1.  Why do you have an internal project number that differs from the "official" project number in the accounting system? What's the value in that?

    2.  Where is the link to contract identifier?

    3. You need a relational database, with all data field active (contract identifier, accounting project number, customer, customer POC, internal POC(s), period of performance, contract value, funding (if incrementally funded), etc. You need another database for subcontractors, purchase orders, and consultants, which ties back to the accounting project number and prime contract identifier.

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