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A Communique from a contract officer stated that the charging of an indirect account could not be used to increase rates for purposes of cost reimbursement.  Anyone heard the latest on this?  I think the contracting officer was just passing down what she had been sent.

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Probably belongs in the other topic. But I think I understand the issue.

Section 3610 of the CARES Act permits contractors to recover paid time off for their employees "at the minimum applicable contract billing rates not to exceed an average of 40 hours per week." Lots of concern about the phrase "minimum applicable billing rates" but most reasonable people interpret it to mean fully burdened labor costs.

Can the paid time off be direct-charged? Yes. That's what Section 3610 envisions. That's why the language is what it is, as quoted above.

Does it have to be? No.

What if it's charged indirect? In that case the contractor's provisional billing rates for 2020 are likely to be below year-end final billing rates.

Can provisional billing rates be updated to recover increased indirect costs related to COVID-19? Yes.

Do they have to be? Maybe. Does your contract include 52.216-7? If so, provisional billing rates "shall" be the anticipated final billing rates.

What if the CACO/DACO/ACO/PCO won't let us update our provisional billing rates? Well, then won't they be surprised at year-end, when provisional billing rates are trued-up to actual rates.

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Note that DOD/DPC is updating and "clarifying" guidance on a weekly basis. Whatever the FAQs say today, they may not say the same thing next week.

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Now I'm being told that for companies sufficiently small, their entire payroll costs can be forgiven, even for employees who are working on a contract.   To reward the company for "not laying off anyone" even if they wouldn't be laid off anyway.

I can't believe that a company can get loan forgiveness plus bill the govt for a contract already in place.  Double-dipping. 

If this is true, contracting officers would have the right to insist that contractors reduce their billings for amounts that correspond to loan forgiveness.

Comments??

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CF,

I believe you are being misinformed. Also your terminology is imprecise.

DOD contractors may record paid time off associated with retaining their workforces as direct contract costs, if they have been impacted by COVID-19 such that their workforces cannot perform work in government-approved facilities AND funding is available. Provided that any credits the contractor may receive are properly reflected in claimed COVID-19 impact costs.

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1 hour ago, here_2_help said:

DOD contractors may record paid time off associated with retaining their workforces as direct contract costs, if they have been impacted by COVID-19 such that their workforces cannot perform work in government-approved facilities AND funding is available.

In addition, the employee cannot work on the contract  remotely.

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