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DODIG Report on DCMA Actions Regarding DCAA Incurred Cost Audit Reports

In a recent report from the Department of Defense Office of Inspector General (“DODIG”) (DODIG-2017-055, dated February 9, 2017) the DODIG found several instances when the Defense Contract Management Agency (“DCMA”) contracting officer’s (“CO”) actions did not comply with Federal Acquisition Regulation (“FAR”), DoD Instruction 7640.02, or DCMA instructions. The findings resulted from a review of 22 incurred cost reports judgmentally selected from a pool of 1,072 Defense Contract Audit Agency (“DCAA”) incurred cost reports issued between September 2013 and July 2015. In its review, the DODIG evaluated the appropriateness of DCMA actions on DCAA findings reported in the 22. Read More.

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Use of Cost Realism in Proposal Evaluations

By: Curt Smith, Manager, Government Contractor Services Group When negotiating a contract price, the primary concern of contracting officers (“CO’s”) should be the price that the government will pay to obtain the required supplies or services from a responsible contractor. Their objective should be to negotiate a contract type and price (or estimated fee and cost) that will result in reasonable contractor risk and provide the contractor with the greatest incentive for efficient and economical contract performance. To achieve this goal, the Federal Acquisition Regulation (“FAR”) requires agencies to establish a negotiating objective based upon a price or cost analysis.. Read More.

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SBA Releases its Small Business Contracting Scorecard

On May 18, 2017, the Small Business Administration (“SBA”) released its annual small business contracting scorecard. This scorecard is a measure of how selected agencies are doing in regard to meeting their small business contracting goals. It should be noted that the scorecard only measures the performance of 24 agencies. Thus, it does not evaluate how all agencies are doing in meeting their small business goals. As described by the SBA, the annual Scorecard is an assessment tool which measures: (1) how well federal agencies reach their small business and socio-economic prime contracting and subcontracting goals; and (2) agency-specific progress. Read More.

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The Auditor Strikes Back: Always a Bonus of Contention

As we reported in October, the Defense Contract Audit Agency (“DCAA”) Contract Audit Manual (“CAM”) was recently updated. One of the 13 areas of cost updated related to bonus and incentive compensation costs. This topic is covered in Chapter 7 of both the previous version and new version of the CAM. Bonuses and incentive compensation can mean many things including cash, stock, stock options, stock appreciation rights, phantom stock plans, and/or a combination of the aforementioned forms. Bonus and incentive compensation can also be paid in the short/current term or in the future/long term. These plans can differ greatly between contractors and. Read More.

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How Many Contractors Does It Take to Run the Government?

By: John Ford , Senior Consultant, Government Contractor Services Group For many years, there has been a debate as to how many contractors are performing work for the government. This issue has two components: (1) the number of entities holding contracts; and (2) the number of individuals who are actually performing those contracts. While the former is fairly easy to determine, the latter is more problematic. This article will discuss two of the tools available to the government to make this determination. These tools also help the government to know how much these employees are costing the government. The first tool, required. Read More.

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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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