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Income Tax reimbursement on Extended TDY


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If government changed the location and working conditions, it is a change.  If it affected the labor availability or willingness to travel without a raise to cover increased employees’ expenses, I could then consider that  the government change impacted the contractors cost due to the changed working conditions. If the contractor was just being a nice guy, then maybe no impact.

In my opinion, an after the fact profit adjustment couldn’t really be justified as “higher risk “, if the risk didn’t occur and it was contractor voluntarily reimbursing employees for taxes paid to be a “good guy”.

But if the parties agreed that the unburdened amount of the employees aditional requests for relief  would suffice as an impact settlement, that could work.

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Mutual agreement of both parties?   After all is not a contract a living document and if something is not working that affects one party enough that both parties agree we need to do something different to make the project a success can not it be done?     

To be clear with regard to this particular thread I am not suggesting just putting a bunch of money into a contractors pocket I am taking about reasonable adjustment to the contract because it makes sense - good faith.   And of note good faith may suggest that the contractor should be as aware of reimbursement for taxes as the government is!  Anyone can read the FAR principles!

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5 hours ago, Neurotic said:

My original question goes to the treatment of the cost since the cost principles make this cost unallowable.

If we are talking about a T&M contract, why do you think the cost principles apply to what costs can be included in the hourly rate?

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13 minutes ago, ji20874 said:

I think OP is talking about negotiating a new contract -- he or she has not inquired about changing or modifying an on-going contract. 

ji, my post above was only in response to Don’s last question. The contractor asked for an adjustment and they both agreed to it.

As for a new contract for the same conditions, the contractor can easily handle it in new proposed hourly rates in agreement with its labor force. He doesn’t have to identify any travel reimbursement taxes in the new rates. They would just be higher. 

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1 hour ago, C Culham said:

Mutual agreement of both parties?   After all is not a contract a living document and if something is not working that affects one party enough that both parties agree we need to do something different to make the project a success can not it be done?     

To be clear with regard to this particular thread I am not suggesting just putting a bunch of money into a contractors pocket I am taking about reasonable adjustment to the contract because it makes sense - good faith.   And of note good faith may suggest that the contractor should be as aware of reimbursement for taxes as the government is!  Anyone can read the FAR principles!

Wouldn't there need to be consideration?

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