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Government Contractors

ASBCA Holds that Leases are not Necessarily Subject to CAS 404

In Exelis, Inc., ASBCA No. 60131 (29 Aug. 2016), the Armed Services Board of Contract Appeals (“ASBCA”) held that a concern whether a building lease was a capital lease or an operating lease is not subject to Cost Accounting Standards (“CAS”) 404. In 2007, the Defense Contract Audit Agency (“DCAA”) released its audit of Exelis’ 2004 final indirect cost rates. DCAA questioned Exelis’ lease costs, finding that the building lease was a capital lease instead of an operating lease as claimed by Exelis and that Exelis could only include building depreciation in its indirect cost pool rather than the entire. Read More.

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GAO Denies Bid Protest

The Government Accountability Office (“GAO”) has denied a bid protest challenging the agency’s evaluation of the protester’s proposal as unacceptable because the protester did not demonstrate that it had an accounting system that had been approved by the Defense Contract Audit Agency (“DCAA”). The National Security Agency (“NSA”) issued a small business set aside Request for Proposal for business, engineering, information technology, operations, and training support services. One of the evaluation subfactors was that offerors have an accounting system “that has been deemed acceptable for award by a [Defense Contract Audit Agency (DCAA)] audit at the time of proposal submission. Read More.

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Proposed Rule: Opening the Dialogue for Government and Industry to Play Friendly

On November 29, 2016, the Department of Defense, General Services Administration, and National Aeronautics and Space Administration proposed an amendment to the Federal Acquisition Regulation (“FAR”). The purpose of this amendment is to clear misconceptions regarding the responsibilities of communication between government and industry during the acquisition process. By adding more explicit language to the FAR, the agencies involved hope to create more effective communication between government and industry. So what is the potential impact on regulation? FAR part 1.102-2 dictates the “performance standards” placed on private industry in the acquisition process. This rule proposes to amend FAR 1.102-2(a)(4) of. Read More.

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Auditor Strikes Back: No Changes to Alcohol Allowability Guidance

As we reported in October, the Defense Contract Audit Agency (“DCAA”) Contract Audit Manual (“CAM”) was recently updated. One of the thirteen areas of cost updated related to alcoholic beverages. This topic is covered in Chapter 2 of the new Selected Areas of Cost Guidebook. The revised guidance has not reflected a change in position by DCAA or the Federal Acquisition Regulation with respect to allowability on alcoholic beverages. The guidebook has added a frequently asked question related to whether alcoholic beverages are unallowable for nonprofit entities. The short (and long) answer is yes, alcoholic beverages are expressly unallowable in accordance with. Read More.

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Final Overtime Rule on Hold

A November 22 preliminary injunction has blocked the Final Overtime Rule scheduled to become effective Thursday. Last week’s ruling by Federal Judge Amos Mazzant determined that the Department of Labor overstepped its authority by amending the salary threshold for employees exempt from overtime pay. The overtime rule would have increased the salary level for exempt white collar employees to $913 per week. Nearly two dozen governors and attorneys general challenged the overtime rule. Judge Mazzant sided with the plaintiffs, saying that the Department of Labor could not create a distinct standard for overtime eligibility. The Department of Labor is likely. Read More.

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The Auditor Strikes Back: Patent Costs Get an Update

As we reported in October, the Defense Contract Audit Agency (“DCAA”) Contract Audit Manual (“CAM”) was recently updated. One of the thirteen areas of cost updated related to patent costs. This topic is covered in Chapter 52 of the CAM, with the new version being separated into three key topics: 52-1, Allowability of Patent Costs 52-2, Patent Rights – Ownership by the Contractor and the Allowability of Associated Patent Costs 52-3, Special Requirements for Nonprofit Organizations Previously, the DCAA CAM addressed patent costs in Chapter 7-700, which was less than three pages in length on treatment of patent costs for allowability purposes. The. Read More.

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