Non-Commercial IDIQ without prime contract

[Trying to stay current]

need a sanity checks

TCPD (TINA) can only be applied when tied to a government prime contract yes? As a DOD contractor we are trying to establish an IDIQ with a major subcontractor for non-commercial items which will exceed $2M and require certification. The goal is establish the IDIQ with an included minimum and the fixed prices negotiated and determined fair and reasonable certified to at the top level. This would eliminate multiple certifications, proposals, cost analyses, negotiations, administration, etc. We would also like to be be able to use the settlement pricing, lead-time and terms and conditions (with the exception of prime contract specific flowdowns) for a number of various different USG customer demands. 

It is important to note the subcontractor will deny access for audit of proposal information so a DCMA assist audit will be required to be performed by the DCAA.

Is it possible to use the most current contemplated USG Customer requirement to support the audit request and allow the application of TINA to achieve this? OR is there an easier way? 

 

[here_2_help]

In 2018, DCAA issued audit guidance regarding Long-Term Agreements (LTAs). Unfortunately, the audit guidance is no longer available--which perhaps means it has been incorporated into the Contract Audit Manual or elsewhere (I didn't check). The audit guidance clarifies that auditors can review the reasonableness of LTA pricing independently of a government solicitation. In other words, a contracting officer can request a DCAA review of LTA price reasonableness before the LTA pricing is incorporated into a contractor cost proposal. According to the MRD, there are four preconditions that need to be in place before the auditors can perform an audit. They are:

1. The subcontract proposal has been approved by the appropriate subcontractor management.

2. The prime contractor has submitted the subcontract proposal to the Government with an assertion from the prime contractor’s management that it intends to award an LTA with the subcontractor and identifies the benefit of the LTA to the Government

3. The subcontract proposal is adequate for examination based on the requirements set forth in FAR Subpart 15.4, Contract Pricing

4. The Contracting Officer has determined that subcontract audit support is required based on DFARS PGI 215.404-3, Subcontract pricing considerations

Importantly, it seems that DCAA envisions that the contractor will engage with its contracting officer (and the auditors) prior to negotiating and finalizing the LTA pricing. Based on what we see (above), the prime contractor will request a proposal from the LTA supplier and then submit it to a contracting officer for … what? The audit guidance is not clear.

I hope this helps.

[Neil Roberts]

On 7/22/2024 at 6:33 PM, Trying to stay current said:

We would also like to be be able to use the settlement pricing...for a number of various different USG customer demands. 

Prior pricing of procurements may be useful to compare pricing of later same or similar non-competitive procurements to the extent appropriate adjustments are taken into account in the analysis i.e., inflation, quantity, quality, delivery schedule, etc.

[Neil Roberts]

On 7/22/2024 at 6:33 PM, Trying to stay current said:

Is it possible to use the most current contemplated USG Customer requirement to support the audit request and allow the application of TINA to achieve this? OR is there an easier way?

In your negotiations with the subcontractor, you may wish to include a requirement that at your expense, the subcontractor agrees its proposal information and support may be disclosed to a 3rd party accounting organization that signs a non-disclosure agreement, and/or the subcontractor agrees that a government function having current oversight of subcontractor may disclose any and all subcontractor rates to your company that have been agreed to by such function.

[Neil Roberts]

On 7/22/2024 at 6:33 PM, Trying to stay current said:

It is important to note the subcontractor will deny access for audit of proposal information

This is a business risk to your company and should have been taken into account in making the source selection decision. In my experience, an internal evaluation would be made to determine whether the next highest bidder, which does not have this limitation, is actually the best value.

[Vern Edwards]

On 7/22/2024 at 7:33 PM, Trying to stay current said:

As a DOD contractor we are trying to establish an IDIQ with a major subcontractor for non-commercial items which will exceed $2M and require certification.

Will the IDIQ be awarded in support of a particular contract?

[Moderator]

Rule 17 violation.