FAR 52.217-3, 52.217-4 & FAR 52.217-5 Evaluation of Options

Applicability:  As stated at FAR 17.208(a) thru (c), the provisions at FAR 52.217-3, 52.217-4, and 52.217-5 are included in solicitations as follows: (a) Insert FAR 52.217-3 when the solicitation includes an option clause and does not include one of the provisions prescribed in paragraph (b) or (c) below. (b) Insert FAR 52.217-4 when the solicitation includes an option clause, the contracting officer has determined that there is a reasonable likelihood that the option will be exercised, and the option may be exercised at the time of contract award. (c) Insert FAR 52.217-5 when: (1) The solicitation contains an option clause; (2) An option is not to be exercised at the time of contract award; (3) A firm-fixed-price contract, a fixed-price contract with economic price adjustment, or other type of contract approved … Continue reading

CAS 408 – Accounting for Costs of Compensated Personal Absence (Part 2 of 2)

*This is Part 2 of a 2-part blog.  Each part addresses the fundamental requirements and techniques for application related to the standard, and provides specific examples. Part 1 addressed measurement of the costs of compensated personal absence. This Part 2 addresses the assignment and allocability of the costs of compensated personal absence. Background:  This standard provides the criteria for measuring, assigning, and allocating the costs for vacation, sick leave, holiday, and other compensated personal absence.  Although the purpose section of the standard only mentions measurement, the fundamental requirements and techniques for application provide criteria related to measurement, assignment, and allocability. Assigning Cost of Compensated Personal Absence to Accounting Periods CAS 408-40(a) and CAS 408-50(b)(1)) require that the costs of compensated personal absence be assigned to … Continue reading

CAS 408: Accounting for Costs of Compensated Personal Absence (Part 1 of 2)

*This is Part 1 of a 2-part blog.  Each part addresses the fundamental requirements and techniques for application related to the standard, and provides specific examples. This Part 1 addresses measurement of the costs of compensated personal absence. Part 2 will address the assignment and allocability of the costs of compensated personal absence. Background:  This standard provides the criteria for measuring, assigning, and allocating the costs for vacation, sick leave, holiday, and other compensated personal absence.  Although the purpose section of the standard only mentions measurement, the fundamental requirements and techniques for application provide criteria related to measurement, assignment, and allocability.   Key Definitions The standard includes the following key definitions that establish the basis for the criteria contained in CAS 408. Compensated Personal Absence … Continue reading

FAR 52.216-31 Time-and-Materials/Labor-Hour Proposal Requirements (Part 3)

Commercial Item Acquisition NOTE: This is the third in a three-part series on Time-and-Materials/Labor-Hour Proposal Requirements.  Part 1 addressed non-commercial item acquisition with adequate price competition (FAR 52.215-29).  Part 2 addressed non-commercial item acquisitions where there is not adequate price competition (FAR 52.216-30).  This Part 3 addresses commercial item acquisitions at FAR 52.216-31 (which must, by law, be awarded based on adequate price competition).    Applicability: As stated at FAR 16.601(f) (3), the solicitation provision at FAR 52.216 31 applies to Time-and-Materials/Labor Hour (T&M./LH) solicitations for all acquisitions contemplating the use of a Commercial Time-and-Materials or Labor-Hour contract.   Key Requirements: T&M/LH contracts provide for reimbursement to the contractor based on a fixed hourly rate for each labor category listed in the contract.  Under the current FAR … Continue reading

FAR 52.216-30 Time-and-Materials/Labor-Hour Proposal Requirements (Part 2)

Non-Commercial Item Acquisition with Adequate Price Competition NOTE: This is the second in a three-part series on Time-and-Materials/Labor-Hour Proposal Requirements.  Part 1 addressed non-commercial item acquisition with adequate price competition. This Part 2 addresses non-commercial item acquisitions where there is not adequate price competition (FAR 52.216-30).  Part 3 will address commercial item acquisitions at FAR 52.216-31 (which must, by law, be awarded based on adequate price competition).    Applicability: As stated at FAR 16.601(f)(2), the solicitation provision at FAR 52.216 30 applies to Time-and-Materials/Labor Hour (T&M./LH) solicitations for non-commercial item acquisitions, where the price is not expected to be based on adequate price competition.   Key Requirements: T&M/LH contracts provide for reimbursement to the contractor based on a fixed hourly rate for each labor category listed in the … Continue reading

FAR 52.216-29, Time-and-Materials/Labor-Hour Proposal Requirements

Non-Commercial Item Acquisition with Adequate Price Competition NOTE: This is the first in a three-part series on Time-and-Materials/Labor-Hour Proposal Requirements.  This Part 1 addresses non-commercial item acquisition with adequate price competition.  Part 2 will address non-commercial item acquisitions where there is not adequate price competition (FAR 52.216-30).  Part 3 will address commercial item acquisitions at FAR 52.216-31 (which must, by law, be awarded based on adequate price competition).    Applicability: As stated at FAR 16.601(f)(1), the solicitation provision at FAR 52.216 29 applies to Time-and-Materials/Labor Hour (T&M./LH) solicitations for non-commercial item acquisitions, where the price is expected to be based on adequate price competition.   Key Requirements: T&M/LH contracts provide for reimbursement to the contractor based on a fixed hourly rate for each labor category listed in the … Continue reading

CAS 409 – Depreciation of Tangible Capital Assets (Part 3 of 3)

*This is Part 3 of a 3-part blog.  Each part addresses the fundamental requirements and techniques for application related to the standard, and provides specific examples. Part 1 addressed the general requirements/techniques, as well as those related to determining the estimated useful life of a tangible capital asset. Part 2 addressed the areas of depreciation methods and the determination of estimated residual values. This Part 3 addresses the accounting for gains/losses, cost allocation, and accounting for assets acquired prior to the applicability of CAS 409. Background: This standard provides the criteria for assigning costs of tangible capital assets to cost accounting periods and for allocating such costs within such periods in an objective and consistent manner.  The basic concept is that the amount assigned to … Continue reading

FAR 52.215-16 AND FAR 52.215-17, Facilities Capital Cost of Money

Applicability: These FAR solicitations/clauses address the allowability/reimbursement of facilities capital cost of money. FAR 52.215-16, Facilities Capital Cost of Money, is included in solicitations expected to result in contracts that are subject to FAR Subpart 31.2 (the cost principles for contracts with commercial organizations). FAR 52.215-17, Waiver of Facilities Capital Cost of Money, is included in the contract if the contractor receiving the award did not propose facilities capital cost of money in its offer.   Key Requirements: The solicitation requirement at FAR 52.215-16 and the contract clause at FAR 52.215-17 work in tandem to address the allowability of cost of money under the awarded contract. FAR 52.215-16 states that facilities capital cost of money will be an allowable cost under the contemplated contract, if … Continue reading

CAS 409 – Depreciation of Tangible Capital Assets (Part 2 of 3)

*This is Part 2 of a 3-part blog. Each part addresses the fundamental requirements and techniques for application related to the standard, and provides specific examples. Part 1 addressed the general requirements/techniques, as well as those related to determining the estimated useful life of a tangible capital asset. This Part 2 addresses the areas of depreciation methods and the determination of estimated residual values. Part 3 will address the accounting for gains/losses, cost allocation, and accounting for assets acquired prior to the applicability of CAS 409. Background:  This standard provides the criteria for assigning costs of tangible capital assets to cost accounting periods and for allocating such costs within such periods in an objective and consistent manner.  The basic concept is that the amount assigned … Continue reading

CAS 409 – Depreciation of Tangible Capital Assets (Part 1 of 3)

*This is Part 1 of a 3-part blog.  Each part addresses the fundamental requirements and techniques for application related to the standard, and provides specific examples. This Part 1 addresses the general requirements/techniques, as well as those related to determining the estimated useful life of a tangible capital asset. Part 2 will address the area of depreciation methods and the determination of estimated residual values. Part 3 will address the accounting for gains/losses, cost allocation, and accounting for assets acquired prior to the applicability of CAS 409. Background: This standard provides the criteria for assigning costs of tangible capital assets to cost accounting periods and for allocating such costs within such periods in an objective and consistent manner.  The basic concept is that the amount … Continue reading