Safeguarding of Contractor Information Systems Final Rule Issued
The Department of Defense, General Services Administration, and National Aeronautics and Space Administration issued a final rule on the basic safeguarding of contractor information systems that process, store, or transmit Federal contract information (“FCI”). Effective June 15, 2016, Federal Acquisition Regulation (“FAR”) 52.204-21, Basic Safeguarding of Covered Contractor Information Systems, was created and will be included in all solicitations and new contracts. It will apply below the simplified acquisition threshold and will be a required flow down clause. It will not apply to commercial off-the-shelf items, but will apply to commercial items and to services where FCI occurs. FCI is. Read More.
DOE Issues “Absolute Ban” on Overtime for Training and Education
On May 3, the Department of Energy (“DOE”) issued Acquisition Letter 2016-5 (“ AL 2016-5 ”), which provides guidance for managing overtime costs for training, and explicitly addresses overtime costs for training and education. The AL applies to all contracts and is effective immediately until cancelled. Federal Acquisition Regulation (“FAR”) Subpart 31.2 covers cost principles in contracts with commercial organizations. It stipulates a cost is only allowable only when it complies with all five requirements listed in FAR 31.201-2: Reasonableness Allocability Cost Accounting Standards/Generally accepted accounting principles Contract terms All of the other limitations in FAR Subpart 31.2 The limitations include the. Read More.
New DOL Salary Levels for FLSA-Exempt Employees
The Department of Labor (“DOL”) has finally issued final rules revising the salary levels that will be used to determine if certain employees are exempt from the overtime provisions of the Fair Labor Standards Act (“FLSA” or “the Act”). These rules will appear in the May 23, 2016, edition of the Federal Register and have an effective date of December 1, 2016. Under the FLSA, employees are entitled to be paid time and a half for all hours worked in excess of a normal work week, usually 40 hours. However, the Act exempts employees in executive, administrative, or professional positions. Read More.
Subcontractor Oversight (Who’s Responsible?)
By: Ken Bricker , CPA, DABFA, Partner Who has privity? 42.505 – Post-award Subcontractor Conferences (a) The prime contractor is generally responsible for conducting post-award conferences with subcontractors. However, the prime contractor may invite Government representatives to a conference with subcontractors, or the Government may request that the prime contractor initiate a conference with subcontractors. The prime contractor should ensure that representatives from involved contract administration offices are invited. (b) Government representatives– (1) Must recognize the lack of privity of contract between the Government and subcontractors; (2) Shall not take action that is inconsistent with or alters subcontracts; and (3) Shall ensure. Read More.
Topics: Cognizant Federal Agency "CFA", Cost Accounting Standards "CAS", Defense Contract Audit Agency "DCAA", Department of Defense "DoD", National Defense Authorization Act "NDAA", privity of contract, subcontractors
FLSA Changes on Overtime Compensation Expected Summer 2016
By: Sara Crabtree , Manager Cherry Bekaert has been providing periodic updates on proposed changes to the Fair Labor Standards Act (“FLSA”) in regard to overtime compensation and how employers might be impacted by these changes. The Solicitor of Labor has now confirmed that the changes are expected to be finalized and announced during the late spring or summer of 2016, and will become effective 60 days after finalized. In March 2014, President Obama issued a memorandum to the Secretary of Labor, directing him to “propose revisions to modernize and streamline the existing overtime regulations” (under the FLSA). Although the President did. Read More.
ESOPs Gain in Popularity
By: John Carpenter , Principal Many private company business owners are taking a closer look at Employee Stock Option Plans (“ESOPs”) as a tool for either an exit strategy or a way to “take money off the table” through a sale of a portion of their company stock holdings. ESOPs were a less popular diversification strategy during the 2000s when government spending was on the rise, especially within the Department of Defense (“DoD”) and many companies could sell for attractive multiples with large, upfront cash components. The combination of flat to declining DoD budgets leading to less attractive market multiples, and capital. Read More.