The National Institutes of Health Acquisition and Assessment Center (NITAAC) released its long-awaited Request for Proposal (RFP) for the Chief Information Officer – Solutions and Partners (CIO-SP4) program on May 25, 2021. Phase I of the evaluation of offeror proposals will consist of validation of the offeror’s completed self-scoring sheet and ranking the offerors based on this scoring. Only the highest rated offerors will advance to phase 2 of the evaluation. Accordingly, every point counts!
A commercial item determination should define the item or service, document market research, identify the FAR 2.101 Commercial Item definition, and include a “determination” that the item is commercial. Sounds easy right!
If you look through the DCAA audit guidance and the DCMA Contractor Purchasing System Review guidance, you would think that the Government is only concerned with a Commercial Item Determination when the purchase value exceeds $2M. This is all based on commerciality being an exception to the requirement for certified cost or pricing data at FAR 15.403-1(b)(3) & (c)(3).
Topics: Business Systems Review, Cost and Pricing and Budgeting, Defense Contractors, DFARS Business Systems, Contractor Purchasing System Review (CPSR), Government Regulations, DOD Contractors, Federal Acquisition Regulation (FAR)
What’s new in this long-standing area?
The FAR Council at long last issues final rule to implement the Trump Executive Order 13881, Maximizing Use of American-Made Goods, Products, and Materials. Only a few days later a Biden Executive Order 14005, Ensuring Future of America is Made in America by all of America’s Workers, hit the streets.
Topics: Business Systems Review, Cost and Pricing and Budgeting, Incurred Cost Submission, Small Business Compliance, Contracts Administration, Defense Contractors, DFARS Business Systems, Incurred Cost Proposals, DCAA Audit Support, Contractor Purchasing System Review (CPSR), Government Regulations, DOD Contractors, Federal Acquisition Regulation (FAR)
Here are the Details
DoD issued a DFARs Final Rule D2019-D029 – Services Provided by Nontraditional Defense Contractors, effective October 1, 2020, to implement several sections of the National Defense Authorization Act for Fiscal Year 2017 that addresses treatment of commingled items purchased by contractors and services provided by nontraditional defense contractors as commercial items. This blog only addresses the DFARS change related to services provided by nontraditional defense contractors as commercial items.
Topics: Cost and Pricing and Budgeting, Defense Contractors, DFARS Business Systems, DCAA Audit Support, Contractor Purchasing System Review (CPSR), Government Regulations, DOD Contractors, Federal Acquisition Regulation (FAR)
Defense Pricing Memo – September 30, 2020
Acting Principal Director, Defense Pricing and Contracting, Mr. Kim Harrington issued a memo on September 30, 2020 to announce that the Defense Contract Management Agency (DCMA) has a new Defective Pricing Pilot Team to provide support to Procuring Contracting Officers (PCOs) to resolve and disposition Defense Contract Audit Agency (DCAA) Truth in Negotiations Act (TINA) compliance audits. DCAA’s new favorite audit it appears. Reading a little into the memo (ok – not too much reading as the memo uses the word – backlog) DCAA has apparently created a new backlog for DoD of what they affectionately call TiN audits. Not a real surprise as DCAA created a TiN team a few years back. DCAA historically had an extensive workload development process to audit all large fixed priced contracts and sample smaller ones that created more audits than resources could accommodate. As we have reported before, now that DCAA is looking for work, the rush appears to be on for DCAA auditors to get back into more defective pricing audits.
The Financial Accounting Standards Board (FASB) issued Topic 842, Leases, in February 2016 effective for fiscal years beginning after December 15, 2018. The change was “to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements.” For the past 40 years or so, operating leases were only required to be presented in the disclosure and were off-balance sheet transactions. Other than the new asset (Right to Use asset) and a related liability on the balance sheet, the impact on the income statement (a single line item for lease expense) and cash flow are unchanged, at least under GAAP. International Financial Reporting Standards (IFRS) now requires all leases be treated similar to capital leases (Topic 842 calls these finance leases). So, under IFRS there will be more unallowable interest to properly account for on Government proposals and contracts incorporating FAR Part 31.
We Lifted the Vail
A few months back we submitted a request to DCAA under Freedom of Information Act. Based on the DPC guidance referencing both DCAA and DCMA as playing a key role in support of the rest of the DoD Acquisition Community, we expected DCAA would have a significant number of documents disclosing this key role. Turns out, not so much. All we got was a single document listing 13 frequently asked questions (FAQs) DCAA has been fielding from their auditors, dated July 31, 2020.
Topics: Cost and Pricing and Budgeting, Contracts Administration, Defense Contractors, Cost-Type Contracts, DCAA Audit Support, Defense Procurement and Acquisition Policy (DPAP), DOD Contractors, Cost Accounting Standards (CAS), COVID-19
Topics: Business Systems Review, Cost and Pricing and Budgeting, Defense Contractors, Cost-Type Contracts, DCAA Audit Support, Accounting & Billing System, DOD Contractors, Cost Accounting Standards (CAS), Federal Acquisition Regulation (FAR)
A recent DCAA audit reintroduced (or resurrected) a DCAA MRD (Memorandum for Regional Directors) dated March 22, 2010 which provided auditors with DCAA’s liberal interpretation of a January 2010 change to FAR 31.205-46(b) limiting allowable airfare to “lowest priced airfare available to the contractor.”