Gold and Marooned Posted January 31 Report Share Posted January 31 We are an 8(a) Joint Venture between an 8(a) protégé and its OTSB mentor. We have our first 8(a) sole source award under a services NAICS code that includes supplies with a contract price of ~$500K. We negotiated the price with the agency and the price is firm fixed price. We subbed out a small portion of the work to an OTSB, and the mentor issued that subcontract, rather than the JV. After deducting the value of the subcontracted work, we deducted the cost of supplies (including OH and profit) from the contract value in accordance with 13 CFR 124.510 and 13 CFR 125.6. The remaining portion of the contract price that the government will pay was then divided by the JV into 2 scopes of work. The OTSB is performing 60% of the JV workshare (as measured by its internal cost buildup of the labor portion of the contract, including OH and profit) and the 8(a) is performing 40% of the JV workshare (also as measured by its internal cost buildup for the labor portion of the contract, including OH and profit). We are now performing the contract and I have a couple practical accounting questions. Were we correct to keep the OH and profit with the appropriate labor and supply scopes for evaluating compliance with the limitation on subcontracting and performance of work requirements? We had to provide the price buildup to the government as part of the pricing negotiations prior to award. But the price is now FFP. Do we have to track the "budget" to actual? If the profit or overhead costs end up being more or less than anticipated for either party, do we need to do anything? I don't think we do. Agree? The JV itself will have no profit. All work is assigned to the JV partners along with the corresponding profit. We believe this is fine, and actually a common way to do it. Agree? Thanks for any insight. Quote Link to comment Share on other sites More sharing options...
C Culham Posted February 1 Report Share Posted February 1 22 hours ago, Gold and Marooned said: Thanks for any insight. 1., 2. and 3. I would say best answered by SBA. A reference I do not see in your original post is 13 CFR 124.513. Have you read this part of the CFR? Reminder compliance with the joint venture rules and individual joint ventures becomes a matter of annual review regarding continued eligibility for the 8(a) program. Quote Link to comment Share on other sites More sharing options...
Retreadfed Posted February 1 Report Share Posted February 1 GandM, just to be sure, what version of the Limitation on Subcontracting clause is in your contract? Quote Link to comment Share on other sites More sharing options...
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