Redstone Government Consulting Blog (17)

Many new government contractors are frustrated by being told they have a CAS 401 noncompliance, especially if they are not CAS covered. This is, of course, wrong terminology for non-CAS covered contractors, but is shorthand for saying the company is not estimating, accumulating, and reporting costs the same way. This is most frequently a difference between how a company estimates cost and then how the company accumulates and reports costs. This is not only important to the government, but to the company itself. A contractor cannot determine whether it is losing money on a contract if there is no way to compare what was bid to what was incurred. This is likely one of the first CAS standards a company encounters because even modified coverage calls this standard into play.

The Small Business Administration issued a final rule effective August 22, 2022 (Federal Register: Past Performance Ratings for Small Business Joint Venture Members and Small Business First-Tier Subcontractors), which provides two new methods for small business government contractors to obtain/receive credit for past performance ratings. Prior to this rule, small businesses did not always receive credit for past performance for much of their efforts supporting the Federal Government. A small business can now get credit for past performance under a joint venture or use a past performance rating for work performed as a first-tier subcontractor to compete for their own prime contracts. See Redstone’s blog “Small Businesses Have More Opportunities to Obtain Past Performance Ratings under SBA Final Rule”. It is unclear whether the FAR 52.219-9 Small Business Subcontracting Plan clause will be updated.

The Small Business Administration issued a final rule effective August 22, 2022 (Federal Register: Past Performance Ratings for Small Business Joint Venture Members and Small Business First-Tier Subcontractors), which provides two new methods for small business government contractors to obtain/receive credit for past performance ratings. Prior to this rule, small businesses did not always receive credit for past performance for much of their efforts supporting the Federal Government. A small business can now get credit for past performance under a joint venture or use a past performance ratings for work performed as a first-tier subcontractor to compete for their own prime contracts. It is unclear whether the FAR 52.219-9 Small Business Subcontracting Plan clause will be updated.

Organizations that have federal awards, whether that be grants, cooperative agreements or contracts, must comply with specific cost accounting regulations. Unfortunately, depending on the type of federal award, the regulations may not be the same. Both, both Grants or Cooperative Agreements awarded under 2 Code of Federal Regulations (CFR) 200 and Contracts awarded under 48 CFR Federal Acquisition Regulations (FAR) provide requirements for cost allowability, allocability, and reasonableness as well as the required cost accounting treatment for all cost:

Oftentimes when supporting the production of cost volumes and pricing exercises for clients, we’re given a basis of estimate (BOE) that has been written by someone on the technical team. Even being a group of accounting and compliance professionals who know little in areas such as cyber, engineering, or other technical areas of the scope of work, we’re left scratching our heads. This usually leads to several back-and-forth discussions centered around gleaning enough information from the technical team to pass the proverbial government “sniff test”.

The Office of Management and Budget (OMB) issued a proposed rule to add a new Part 184 in 2 CFR Chapter I and revisions to 2 CFR 200.322 Domestic preferences for procurements on Build America/Buy America Act for Grants and Agreements. The revision will address the Buy American Preference for awards with infrastructure expenditures. Comments to the proposed rule are due March 13, 2023.

What is the Incurred Cost Submission? What is Schedule O? What are the Supplemental A Schedules? This VLOG will briefly explain the Incurred Cost Submission, how to complete Schedules O and the Supplemental A Schedules, and the importance of those schedules.

What is the Corporate Scheduling Announcement List (CSAL)?

DoD issued a DFARS Final Rule on Treatment of Incurred Independent Research and Development Costs (DFARS Case 2017-D019). The rule is effective January 31, 2023.

On January 5, 2023, the Federal Trade Commission (FTC) voted 3-1 on proposed regulations that, if upheld, would ban employers from imposing non-competition agreements on their employees. Relying on Section 5 of the FTC Act, the FTC concluded that “non-compete clauses reduce competition in labor markets, suppressing earnings and opportunity even for workers who are not directly subject to a non-compete.” Commissioner Wilson dissented, stating that the FTC lacks the authority to engage in rulemaking, particularly with consequences of this significance.