FAR 52.216-7, Allowable Cost and Payment (Part 2 of 2)

Applicability: This FAR clause is incorporated in cost reimbursement contracts and Time-and-Materials (T&M) contracts for other than commercial items. For T&M contracts, the clause only applies to the part of the contract that reimburses materials on the basis of actual cost. The clause also includes four alternate versions, whose inclusion was discussed in Part 1 of this two-part series.   Key Requirements: The clause addresses two key areas, (1) interim reimbursement of costs, and (2) determination of final indirect rates. Part 1 of the two part series addressed the interim reimbursement of costs. This Part 2 of our series addresses the determination of final indirect rates. In regards to the determination of final indirect rates, the clause requires the contractor to submit an adequate final … Continue reading

GAO Recommends Little Relief to Incurred Cost Submission Backlog

Guest Authors: Capital Edge Consulting (http://capitaledgeconsulting.com/): The recent GAO report on the backlog of audits of Incurred Cost Proposals is unfocused.  The conclusion highlights the fundamental issue at hand in the statement, “DOD has fallen far behind in closing out its contracts, in part due to the large backlog of incurred cost audits that must be performed by DCAA…” The GAO’s “Recommendations for Executive Action” include recommending DCAA, “…assess whether its incurred cost backlog initiative is achieving the objectives of reducing the incurred cost audit backlog…”  With this suggestion, GAO is recommending DCAA engage in the same metric type exercise that landed it in hot water in 2009 (GAO Report 09-468, September 2009).  Clearly, the GAO’s recommendations lack substance on how to increase the rate of … Continue reading