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Everything posted by here_2_help
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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?
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Government Shutdown - Stop Work/ Delivery
here_2_help replied to Fobbulous's topic in Contract Administration
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 -
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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I will add that, in a CPFF contract, the fixed fee is, literally, fixed. It does not change when you add a new subcontractor, unless there is something else going on, such as a change in the required work. The profit rate you negotiate with your subcontractor is strictly between you and the subK. Whatever the subK bills you becomes "cost" to your prime contract.
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Seems to me that the "customer" is equating spending money (as reported on progress payment financing requests) with making technical progress. Have we forgotten the lessons learned from the A-12 debacle already? (Yikes!) There are other means to determine the contractor's technical performance. Monthly reports (CDRLs) are one means of doing so. Second, if this "big" contractor doesn't want progress payments, there must be some other reason. Why? Because "cash is king." Every contractor in the world wants--or should want--enhanced cash flow. They will frequently trade profit for enhanced cash flow. My thought is that there must be some other (unstated) reason for not wanting progress payments. For example, FFP without progress payments avoids most if not all auditor scrutiny. If the contractor is trading cash for a lack of auditor scrutiny, that would signal to me that the contractor has something to hide. At a guess, they have an accounting system issue. (I.e., use of progress payments requires an "adequate" accounting system as determined by DCAA auditors.) FFP means that the accounting system issues remain unobserved and unknown. After all, if the price was fair & reasonable, nobody really cares what the contractor is spending. Though another possible reason for denying progress payments is that the contractor is making a huge windfall profit and it doesn't want USG to know, as a huge underrun against planned/negotiated costs would smell like defective pricing and--again--the auditors would be brought in to see what was really going on. (You can always bring in the auditors afterwards, for a post-completion "truthful cost or pricing data" audit.) Those are my thoughts, for what they may be worth.
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CAS clauses flow-down by the express direction of the language. In 52.230-6(l), the clause states: Thus, the prime flows-down to 1st tier negotiated subcontracts that are CAS-covered. The clause is now in the 1st tier subcontract. Should that subcontractor award a negotiated CAS-covered subcontract to the next tier, the clause--by its express language--must flow. Now the 2nd tier subcontract has that clause and the 2nd tier subcontractor must comply.
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I'm wondering what services the subK will be providing to the prime, and whether the staffing levels can be assured by means other than contract type. For example, can you create a clause that mandates a certain LOE with appropriate damages (liquidated?) for failing to maintain. Or maybe a CPIF type where the incentive fee is tied to the prime's award fee %. Just some thoughts.
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Sufficient Justification to Exceed GSA Hotel Rates?
here_2_help replied to Ribkah's topic in For Beginners Only
The Federal Travel Regulations probably do not apply in full to a contractor's travel. The FTR does, however, provide a good guideline as to what contractor travel costs may be reasonable for a CO to approve. The FTR discusses when "actual" expenses may be used in lieu of locality per diem rates for lodging. -
Today's main page has a link to an interesting ASBCA decision where the contractor not only received a contract extension for COVID-related delays, but was also awarded compensation for the additional costs it had to incur. A key part of the decision was to note that the contractor was not prevented from delivery of CLIN-required rental items; the pandemic required the government to use those rental items for longer than originally planned. Even though the CLIN was FFP, the contractor was entitled to be compensated for its additional costs.
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On today's WIFCON front page, there is a link to CAAC Letter 2023-04 (CAAC Consultation to Issue a Class Deviation From the Federal Acquisition Regulation (FAR) Regarding the Small Business Administration (SBA) Memorandum, “Impact of Recent Court Decision (Ultima Servs. Corp. v. Dep’t of Ag. (E.D. Tenn.)) on the use of the 8(a) Program”).
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Software to make CPSR requirements easier
here_2_help replied to LucyQ's topic in Subcontracts & Subcontract Management
All I can say is that my companies have had their buyers check the excluded parties website (manually), print out the results showing the date checked, and stick the printout in the purchase file. Okay, nowadays they do this electronically by attaching the screenshot to the electronic PO. But still, I have not worked with a company that outsourced this process. That's not to say that it couldn't be outsourced; however, my companies thought that making the excluded parties check was an essential function of being a buyer and they expected their buyers to do it. Apologies for not being more helpful. -
Software to make CPSR requirements easier
here_2_help replied to LucyQ's topic in Subcontracts & Subcontract Management
I'm a bit confused. How is the contractor currently complying with requirements related to responsibility determinations and excluded parties? Are the searches being done by hand, or are they not being done at all? Also, I'm not sure how an Approved Supplier designation plays into CPSR compliance. I don't know all the (many) adequacy criteria off the top of my head, but I don't recall one associated with having an Approved Supplier list. Hopefully, you can enlighten me on that one. If the issue is that being designated as an Approved Supplier means that future responsibility determinations and/or excluded party searches don't have to be performed, I don't think that's the case. -
CAS applicability to items treated as commercial
here_2_help replied to FARCRAZY's topic in About The Regulations
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Hi Jiggy, Absent a request for extraordinary relief, I don't see how you obtain any such modification.
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I'm confused. Have you read the clause at 52.216-7 (Allowable Cost and Payment)? By contract clause, you are supposed to adjust your provisional billing rates so as to match your estimated final billing rates. There is no reason for a large disparity in billing rates to exist. In fact, any such disparity is contrary to the clause's requirements. Where are these "fears" coming from? Do you know that your final rates will be higher than your provisional billing rates? If you know, then you should do something about it now, IAW 52.216-7. If you don't know -- then why don't you know? Isn't somebody in Finance running variance analyses? If not, why aren't they? I don't mean to be a jerk but this is all fairly fundamental cost-reimbursable contract stuff. In many contracts, indirect rates make up 50% of total costs billed. It is the responsibility of the contractor--not the government--to manage those rates.
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Yes. Now I would like to add something in case it has not become obvious. 1. You pay salaried employees a salary. The salary is independent of the number of hours worked and recorded. In a perfect world, a salaried employee will record 2,080 hours per year. (52 weeks x 40 hours per week). 2. Salaried employees fill out time cards (or they should, as Raytheon learned at the Federal Circuit in January of this year). Let's assume those are weekly time cards. On each time card, the salaried employee records the hours spent on each assigned cost objective. (To make it easier, let's say those cost objectives are either contracts, overhead, or some paid-time-off account such as vacation or holiday.) In a perfect world, the perfect 40 hours per week will be spread across whatever cost objects were worked. Maybe it's 40 hours to only one contract; but more likely the 40 hours are being charged to multiple things each week. 3. Each cost object "thing" has a code associated with it -- traditionally called "the charge number". So, when the employee turns in the weekly time card, there are hours associated with each charge number. There are many employees, so there are many time cards. The labor system aggregates all the time card data by employee each pay period. 4. Separately, the employee gets paid. Let's assume the employee is paid weekly -- i.e., annual salary divided by 52 equals the weekly paycheck. The paycheck is reduced for taxes and the cost of benefits to generate the net takehome pay for the week. That's what Payroll does. 5. Separately, the gross payroll (before taxes/benefits) is distributed to cost objects in accordance with the time card data. Thus, the time card is the method for distributing the salary costs. To the extent the charge numbers reflect "contracts" the distributed payroll shows up as a contract cost -- i.e., as direct labor dollars. 6. Yes, the world is rarely perfect. Sometimes more than 40 hours are recorded in a work week - UCOT. Sometimes less than 40 hours are recorded (LWOP - Leave Without Pay). There are various accounting methods for dealing with those issues. The bottom line answer to the OP is that the contractor bills for the direct labor dollars that were distributed by the labor accounting system to the cost-reimbursable contract, based on the time cards submitted by salaried (and hourly) employees during the billing period. NOTE: An adequate accounting system provides for reconciliations between the payroll system and the labor distribution system. Hope this helps.
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31.201-2 Determining allowability. (a) A cost is allowable only when the cost complies with all of the following requirements: (1) Reasonableness. (2) Allocability. (3) Standards promulgated by the CAS Board, if applicable, otherwise, generally accepted accounting principles and practices appropriate to the circumstances. (4) Terms of the contract. (5) Any limitations set forth in this subpart.
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To all, I just got off the phone with Vern (his eye is improving a little bit each day, by the way). He wanted me to make the following points on his behalf. 1. As I stated in an earlier post, this is a known issue. It's been around since ID/IQ awards started to be made to multiple offerors, especially those for services. Formerly (according to Vern), agencies awarded ID/IQ contracts to individual contractors, and those awards were for goods (not services). That has changed but the FAR Council and CAS Board haven't adapted to the changes. There is simply very little (if any) guidance on the issue. 2. Since FAR and CAS are silent, a contracting officer has the flexibility to craft their own solution (See FAR 1.102(d).) This would be a permissible exercise of authority and not a deviation. 3. Therefore, a contracting officer faced with this situation could craft one or two contract clauses, stating that (a) each order is divisible and separate from the others, and (b) CAS coverage and rules shall be applied at the individual order level. Again, I'm paraphrasing a conversation. Any errors in translation are mine.