CAA Issues a Delinquency List and Guidance Regarding the Assessment of Unilateral Rate Determinations for Overdue Indirect Rate Proposals

To learn more about this topic, sign up for the April 14 Financial Forum Webinar: Preparing and Defending Your ICS and Avoiding the Deficiency List, Disallowances and Penalties.  The Defense Contract Audit Agency (“DCAA”) recently issued a Memorandum for Regional Directors (“MRD”) which accompanies a “delinquency list” and guidance regarding the steps that DCAA and the Defense Contract Management Agency (“DCMA”) will take this year in connection with certain outstanding final indirect rate proposals.  The MRD indicates that DCMA may unilaterally establish contract costs in mid-2015 for hundreds of contractors that allegedly have not timely submitted such rate proposals.  FAR 42.703-2(c) and FAR 42.705(c) permit unilateral rate determinations in limited circumstances.  Even where such a determination is authorized, however, the unilateral rate must bear some reasonable … Continue reading

Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards

Written by Mary Karen Wills, Sajeev Malaveetil,  and Ryan D. Byrd at the Berkeley Research Group To learn more about this topic, sign up for our OMB SuperCircular 2 CFR Part 200 Webinar on July 15, 2014. On December 26, 2013, the Office of Management and Budget (OMB) released its final “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.” This guidance is applicable to grants and cooperative agreements and represents a comprehensive consolidation and revision of OMB Circulars currently governing Federal awards to non-Federal entities. The guidance combines A-110 and A-102 into a single set of administrative rules; combines A-21, A-87, and A-122 into a single set of consolidated cost principles with entity-specific appendices describing indirect rate guidance for government, higher education, and … Continue reading

End of Fiscal year Spending on Training

The end of the federal government’s fiscal year (September 30th) is rapidly approaching, and the usual scramble to make certain that every budget dollar is spent will soon commence.  This can provide an agency with a great opportunity to obtain training for its employees.  In today’s procurement environment there is a substantial pent-up need for training, since during the past few years training dollars have often fallen victim to budget tightening and sequestration. Agencies that wisely choose to use their end-of-year dollars for training should make sure, however, that they commit the funds – i.e., actually register for the training – during the current fiscal year, rather than merely setting aside the money for training use.  Otherwise, they may fall victim to the “bona fide … Continue reading

Saving Cost and Adding Value to the Company: A Brief Note on Having In-House Counsel Move to Have the Government File Complaints Before the Boards of Contract Appeals

  In a previous blog posting[1], I advocated that in-house counsel, in these times of budget cuts and reduced contract actions, can add value to their client by, generally, assuming matters typically handled by retained counsel, such as litigation before the Boards of Contract Appeals and by, specifically, filing motions to dismiss for statute of limitation violations under the Contract Disputes Act, when warranted by the facts.  This brief note further encourages in-house counsel, under certain circumstances and for various tactical reasons, to move the Board to order the government to file the complaint in an appeal.  In a recent decision, the Armed Services Board of Contract Appeals (ASBCA) addressed those circumstances where it would be appropriate for the government, instead of the contractor, to … Continue reading

Hot Topics in DCAA – San Diego

With the ongoing challenges in government contracting, knowledge of DCAA audit focus areas and trends including real world experiences with current and ongoing DCAA audits is invaluable. Learn from industry experts- Attend DCAA Hot Topics – Understanding the Current Audit Environment & Contractor Challenges June 10th in San Diego, CA. The training session will provide participants with a detailed overview of five key current issues: Incurred Cost Audit Trends Criteria for High Risk/Low Risk Incurred Cost Determination. DCAA vs. DCMA – The Changing Tide of Who is Responsible for Contractor Oversight Most Common DCAA Questioned Costs Best Practices on Mitigating Audit Findings   Capital Edge will share its current and ongoing experiences with the challenging and ever-changing DCAA Audit Environment to ensure that participants not … Continue reading

Hot Topics in DCAA

Recently, DCAA reminded its auditors that access to contractor employees is a “routine and established audit procedure” which is necessary to comply with GAGAS (Generally Accepted Auditing Standards).  While the initial focus of the guidance to auditors relates to the well-known “floor check” procedure, it also opines that DCAA’s position is that contractors are required to allow access to any employee during any audit who might be a SME (Subject Matter Expert) on contractor processes and procedures, or data provided to the auditor.  DCAA is now focused on this matter because of past criticism by agencies having oversight of its performance.  The Agency’s objective is to ensure auditors have met the GAGAS requirement to “…obtain sufficient evidence to provide a reasonable basis for the conclusion … Continue reading

DOD Class Deviation Further Complicates FSS Ordering

By Phillip Seckman On March 13, 2014, the Director of Defense Procurement and Acquisition Policy issued a Class Deviation that alters the way DOD will utilize Federal Supply Schedule contracts.  Effective immediately, prior to awarding an order against an FSS contract, DOD ordering activity contracting officers must independently make a determination that the FSS order price is fair and reasonable.  This requirement applies regardless of whether the order is for supplies, fixed-price services, or services requiring a statement of work.  One might read the class deviation to signal DOD’s lack of confidence that GSA is securing fair and reasonable pricing when negotiating and awarding schedule contracts.   The class deviation comes on the heels of other changes to the FSS ordering requirements in FAR 8.4.  Specifically, … Continue reading

An In-Depth Look at Why Federal Circuit’s Metcalf Constr. Decision is a Win for Contractors

Last month we profiled the Federal Circuit’s Metcalf Constr. decision about the implied duty of good faith and fair dealing.  This month Beth Ferrell, Jason Workmaster, Luke Meier and I published an in-depth article (i) analyzing the recent evolution of this implied duty and (ii) discussing the standard a contractor now must demonstrate to prove the Government’s breach of the duty.  Importantly, the Metalf Constr. decision solidifies the “reasonableness” standard for proving breach, and clarifies that the much tougher “specific targeting” standard (announced in the Federal Circuit’s 2010 Precision Pine decision) only will be used in limited circumstances.  Although some questions remain about the application of the “specific targeting” standard,Metcalf Constr. clearly is a win for contractors. By Justin M. Ganderson with McKenna Long & Alderidge  

CAS 418 – Allocation of Direct and Indirect Costs (Part 5 of 6)

*This is Part 5 of a 6-part blog. Each part addresses the fundamental requirements and techniques for application related to the standard, and provides specific examples. Part 1 addressed the overall purpose of the standard, as well as the requirements/techniques for application related to direct costs.  This Part 2 addressed the requirements/techniques for application related to indirect cost pools.  Part 3 addressed the requirements/techniques for application related to allocation bases (with the exception of the allocation of indirect cost pools that benefit each other, which is addressed in Part 4 of this blog). Part 4 addressed the requirements/techniques for application related to allocation bases for the allocation of indirect cost pools that benefit each other. This Part 5 addresses special allocations. Part 6 will address … Continue reading

CAS 418 – Allocation of Direct and Indirect Costs (Part 1 of 6)

*This is Part 1 of a 6-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 overall purpose of the standard, as well as the requirements/techniques for application related to direct costs. Part 2 will address the requirements/techniques for application related to indirect cost pools. Part 3 will address some of the requirements/techniques for application related to allocation bases. Part 4 will address the requirements/techniques for application related to allocation bases not addressed in Part 4 of this blog. Part 5 will address special allocations. Part 6 will address pre-determined indirect rates.   Background: This standard provides the criteria for the accumulation of indirect costs, including service center and overhead … Continue reading