The “How-To” for Defining Profit or Fee in DoD Price Proposals
A common question many contractors may find themselves asking: “How are we going to determine and bid profit/fee percentages to be applied in a proposal?” As always, each individual contractor has the right to determine the amount of applied profit/fee they want to bid for each contract. Dependent upon work scope, products/services offered, and even contract type, the risk is different and the competition providing proposals to the end users can vary greatly without going over statutory limitations. Contractors can utilize the Defense Federal Acquisition Regulation Supplement (“DFARS”) Weighted Guidelines approach as a tool in determining their profit negotiation position,. Read More.
DoD’s Final Rule on Counterfeit Electronic Parts Safe Harbor
On August 2, 2016, the Department of Defense (“DoD”) issued its final rule on Detection and Avoidance of Counterfeit Electronic Parts—Further Implementation. The rule amends the Defense Federal Acquisition Regulation Supplement by laying a safe harbor related to counterfeit and suspect counterfeit electronic parts. The safe harbor has three parts: The contractor must establish and maintain a system to detect and avoid counterfeit and suspect counterfeit electronic parts. The contractor must obtain review and approval of its system from DoD. The counterfeit or counterfeit suspect electronic parts must have been provided to the contractor as government property, or the contractor. Read More.
“Double Down” on False Claims Act Penalties
Attention all contractors! Effective August 1, 2016, the U.S. government adjusted the penalty amounts applicable to civil penalties to include the penalty assessed under the False Claims Act (31 U.S.C. 3729(a)). The new penalty has increased from $11,000 to a maximum penalty of $21,563. Additionally, the penalty is assessed on top of “3 times the amount of damages which the Government sustains because of the act of that person,” unless reduced in court. This increase in penalties is actually a “catch up” by the government. The government has taken the position that to ensure an effective deterrent is maintained, and. Read More.
Topics: False Claims Act
DoD Proposes Changes to Cost or Pricing Data Rules for Small Businesses
On August 30, the Department of Defense (“DoD”) issued a proposed rule to implement a section of the National Defense Authorization Act for fiscal year 2016 that provides exceptions from the certified cost and pricing data requirements, and from the records examination requirement for certain awards to small businesses or nontraditional defense contractors. The proposed rule would amend the Defense Federal Acquisition Regulation Supplement (“DFARS”) to provide an exception from cost or pricing data for contracts, subcontracts, or modifications of contracts or subcontracts valued at less than $7.5 million. This exception would be applicable to small businesses or “nontraditional” defense contractors,. Read More.
Topics: Cost Accounting Standards "CAS", Cost Data, Defense Federal Acquisition Regulation Supplement "DFARS", Department of Defense "DoD", National Defense Authorization Act "NDAA", Pricing Data, small business
Q&A: Lost in Time – The Statute of Limitation and Time Limits on Government Contracts
Approximately a year ago, we included an article in our newsletter concerning the six-year statute of limitations (“SOL”) on the assertion of claims under the Contract Disputes Act (“CDA”). This is an area of continuing confusion because it is still developing. In addition to the CDA six-year period, there are other time limits on government contractor actions in regard to government contracts. In a question-and-answer format, this blog will attempt to clarify some of the questions regarding the CDA six-year SOL and other timeliness issues. Q: Does a claim have to be for money? A: No. A claim can be. Read More.
Guidance Issued on Treatment of “Blended” Compensation Caps in Incurred Cost Submissions
On June 30, 2016, the Defense Contract Audit Agency (“DCAA”) issued Memorandum for Regional Directors (“MRD”) 16-PSP-007(R), Audit Alert on Handling Incurred Cost Proposals Using a Blending Approach of Compensation Caps. In this memo, the DCAA discusses how auditors are to treat new and existing incurred cost submissions (“ICS”) that include blended compensation caps, in the absence of an advance agreement. One of the key points of the memorandum is that DCAA should not delay the adequacy review of an ICS if an advance agreement is not present. The audit team must continue with the adequacy review. During the adequacy. Read More.