Provisional Billing Rates – Part II

You now understand a little bit more about provisional billing rates from our first of this two-part series. In this second part of our coverage of provisional billing rates, we delve a little deeper into the purpose behind provisional billing rates as well as how to prepare them and the differences between provisional billing rates and proposal bid rates. Knowing these details will enable you to prepare an accurate DCAA submission.

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Topics: Cost-Type Contracts, DCAA Audit Support, Accounting & Billing System

Provisional Billing Rates – Part I

For our 12/31 year-end contractors, this is a busy time of year.  Year-end books are ending and 2019 budgets are being formed.  This is also the time of year for submitting provisional billing rates or PBRs for contractors that have cost reimbursable type contracts such as cost-type and time and material contracts. 

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Topics: Cost-Type Contracts, DCAA Audit Support, Accounting & Billing System

Key Performance Indicators (KPIs) for Small Business Government Contractors

Key Performance Indicators are “Measures that help decision makers define and measure progress toward business goals. KPI metrics translate complex measures into a simple indicator that allows decision makers to assess the current situation and act quickly.” – KAIZEN Analytics All businesses, regardless of size, should to be able to understand and identify their Key Performance Indicators. KPIs can be used at all levels of an organization, ranging from the CEO to the project manager. The CEO focuses on the overall performance or health of the company, while the program or project manager may focus on single programs, tasks within a program, or a group of programs.

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Topics: Small Business Compliance, Contracts Administration, Cost-Type Contracts

Subcontract Disputes on Cost Type Government Contracts

Although many of us think of contract disputes as those involving a prime contractor and a U.S. Government agency, subcontracts can also trigger differences of subcontract interpretation between the prime and subcontractor. In Civil Action No. 1:16-cv-215, the United States District Court for the Eastern District of Virginia decided a diversity breach of contract case between government contractors (the contractor and subcontractor names are a matter of public record, thus disclosure). Fluor (the subcontractor) contended that they did not agree to a 2.3% cap to their G&A on a proposal effort with the United States Air Force. Their proposal, as a subcontract to their prime contractor, PAE, was ultimately selected for the award, at which time, a subcontract agreement was executed and the two parties began their respective performance on the contract. The specific language of that subcontract agreement is the heart of this case (differentiated from a dispute over the regulatory language contained in a subcontract flow-down).

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Topics: Small Business Compliance, Contracts Administration, Cost-Type Contracts

DPAP Prohibition on Cost-Type Contracts

DPAP (Defense Procurement and Acquisition Policy) recently issued a class deviation—Prohibition on the Use of Cost-Type Contracts for Production of Major Defense Acquisition Programs.  The “prohibition” actually provides for exceptions including certifications (provided to congressional defense committees) of the need which justifies a cost-type contract and steps to limit cost type pricing to portions of the contract which require this contract type.  The class deviation, by reference to a DOD Instruction, defines certain key terms including a major defense acquisition.

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Topics: Defense Contractors, Government Compliance Training, Cost-Type Contracts, DPAP