FAR 52.230-6, Administration of Cost Accounting Standards

* NOTE: This is Part I of a two-part series on this clause:   Applicability: This FAR contract clause is incorporated into all contracts subject to the Cost Accounting Standards.  The clause focuses on administering the requirements imposed under the Cost Accounting Standards.   This clause provides a process for the contractor and CFAO to administer (1) changes in cost accounting practice (required, unilateral, and desirable changes), and (2) noncompliances.  In this Part 1 of the two part series, we will address changes in cost accounting practice.  Note that a Government final determination in administering all CAS issues is made by the Cognizant Federal Agency Official (CFAO).  The Procuring Contracting Officer (PCO) must delegate CAS administration to the CFAO, i.e., the PCO is not authorized under the … Continue reading

52.215-2 Audit and Records—Negotiation

Applicability: This FAR solicitation provision, which is incorporated into the contract and thus becomes a clause, is included in all solicitations and contracts unless the contract is  (a) at or below the simplified acquisition threshold, (b) for utility services at rates established by the general public plus a reasonable connection charge, and/or (c) for the acquisition of commercial items when such acquisitions are exempt from the requirements to submit certified cost or pricing data.  For cost-reimbursement contracts with State and local Governments, educational institutions, and other nonprofit organizations, the clause is included with its Alternate II.   Key Requirements: From a proposal standpoint, when the offeror is required to submit certified cost or pricing data in connection with any pricing action relating to the contract, the contracting officer … Continue reading

FAR 52.219-14 Limitations on Subcontracting *

Applicability: This FAR solicitation provision, which is incorporated into the contract and thus becomes a clause, specifies the percentage of work that must be performed by a small business concern when it receives a set aside reserved for small businesses.  The provision is included in solicitations and contracts for supplies, services, and construction, if any portion of the requirement is to be set aside or reserved for small business and the contract amount is expected to exceed $150,000. This includes all contracts awarded under FAR Subpart 19.8, “Contracting with the Small Business Administration (the 8(a) Program)”.  The clause applies to parts of a multiple-award contract that have been set aside for small business concerns or 8(a) concerns; and orders set aside for small business or 8(a) concerns … Continue reading

FAR 52.212-4 Contract Terms and Conditions—Commercial Items: Alternate I Payments Under Time-and-Materials and Labor-Hour Contracts for Commercial Items

Applicability: FAR 52.212-4 applies to acquisitions for commercial items.  Alternate I of that clause is included when the acquisition of commercial items will be awarded using a time-and-materials (T&M) or labor-hour contract (LH).   Key Requirements:  Alternate I specifies how payments will be made for both the Time and the Materials elements of a T&M contract awarded under FAR Part 12, i.e., the acquisition of commercial items.  Some of these requirements are the same as the requirements in the T&M payments clause for the acquisition of noncommercial items at FAR 52.232-7.  However, there are also some significant differences, particularly in the area of materials.  These key differences are highlighted below.  Alternate I also includes requirements that address Inspection/Acceptance. Ceiling Price, Underpayments/Overpayments, and Terminations.  While these … Continue reading

FAR 52.232-7: Payments Under Time-and-Materials and Labor-Hour Contracts

Applicability: This FAR clause specifies the payment terms for Time-and-Materials (T&M) and Labor-Hour (LH) contracts that were not acquired using FAR Part 12 (commercial items).  The clause is included in solicitations and contracts when a time-and-materials or labor-hour contract is contemplated (other than a FAR Part 12 acquisition).   Key Requirements:  A T&M contract is comprised of two key elements:  (1) Time, and (2) Materials (note that a labor hour contract is a T&M contract without the materials).  The T&M/LH payments clause specifies how payments will be made for both the Time and the Materials elements of the contract.The clause at FAR 52.215-7 also includes key elements related to other areas, including assignment and release of claims; ceiling price; and the timing of interim payments. While … Continue reading

FAR 52.215-22 and FAR 52.215-23: Limitations on Pass-Through Charges

Applicability: These two FAR provisions work together to enforce the FAR limitations on pass-through charges.  Both the solicitation provision (FAR 52.215-22) and the contract clause (FAR 52.215-22) are included in civilian and DoD contracts when the estimated contract value or order value exceeds the simplified acquisition threshold and the contemplated contract type is expected to be a cost-reimbursement type.  In addition, for DoD contracts, they are included when the total estimated contract or order value exceeds the threshold for obtaining certified cost or pricing data unless (a) the contract is fixed price (firm fixed price, fixed-price with economic price adjustment, or fixed-price incentive) awarded on the basis of adequate price competition, or (b) the contract is fixed price for the acquisition of commercial items.   … Continue reading

FAR 52.215-10: Price Reduction for Defective Certified Cost or Pricing Data

Applicability:  Contracts/subcontracts and/or modifications where the Truth in Negotiations Act (TINA) applies.  Note that the application of TINA is determined on a contract by contract action basis.  For example, an initial contract award could be covered, but a particular modification to that contract might not be (e.g., the value of the modification is below the $700,000 threshold for TINA coverage).   Key Requirements: The contractor must furnish certified cost or pricing data that are complete, accurate, and current on the “as of date”.  That “as of date” is specified in the Certificate of Current Cost or Pricing Data signed by the contractor.  The ‘as of date” is generally the date of price agreement; however, the Government and the contractor can mutually agree on a different … Continue reading