Redstone Government Consulting Blog | Federal Acquisition Regulation (FAR) (11)

Recent Armed Services Board of Contract Appeals (ASBCA) cases have rejected contractor requests for equitable adjustments (REAs) related to the impact of COVID-19 on contract performance under firm fixed price (FFP) contracts. In both cases, discussed below, the ASBCA turned to the Connor Bros. Federal Circuit decision (550 F.3d 1368 (2008)). In that decision the Federal Circuit found the act of the Sovereign Government does not result in an act of the Government as a contracting party. Therefore, under the “Changes” clause (FAR 52.243-1, Changes-Fixed-Price) that was in Connor’s contract this did not give rise to an equitable adjustment in the contract price. The basis of the Connor Bros. decision and the two recent cases is the “Sovereign Acts Doctrine.”

Topics: Government Regulations, COVID-19, Federal Acquisition Regulation (FAR)

Government Contractor Purchases below the Micro-Purchase Threshold Require NO Documentation

This is a common misconception within the GOVCON community. While the expectations are clearly less documentation and effort are required than that of a larger dollar value purchase, there is not a magic threshold at which NO documentation of the fair and reasonable price is allowed.

Topics: Compliant Accounting Infrastructure, Incurred Cost Proposal Submission (ICP/ICE), Contracts & Subcontracts Administration, DFARS Business Systems, DCAA Audit Support, Contractor Purchasing System Review (CPSR), Government Regulations, Federal Acquisition Regulation (FAR), Estimating System Compliance

The Government runs away to fight another day and another day.

What is this Groundhog Day?

L3 Technologies, Inc. (L3) takes the Government to task[1] for “challenging both indirect and direct costs paid to L3 on several government contracts for certain years.” During the long-drawn-out process of the litigation, “the government apparently thought better of its claims and withdrew them in toto[2] and represented it would make no further claims on the contract years in question.” L3 opposed, the dismissal seeking either summary judgment in its favor or that the Board “keep the appeals live so that it can obtain a victory that, it believes, would preclude its suffering similar government claims in other contract years.” No such luck, the Board granted the government’s motion and dismissed the appeals.

All we can hope is that someday the fox will get the gingerbread man (aka the Government) and this Groundhog Day nightmare will stop.

[1] Armed Services Board of Contract Appeals (ASBCA) Case Nos. 61811, 61813, and 61814

[2] Fancy Latin word for completely.

Topics: Incurred Cost Proposal Submission (ICP/ICE), Contracts & Subcontracts Administration, DCAA Audit Support, Government Regulations, Federal Acquisition Regulation (FAR)

Lockheed Martin raised a great question to the ASBCA as to “whether the Fly America Act, 49 U.S.C. § 40118 (FAA) and Federal Acquisition Regulation (FAR) 52.247-63 only apply to direct personnel performing direct work on covered contracts, or also applies to indirect personnel or indirect travel.”[1] The Board declined to hear the case as there was no “live dispute” at hand.

[1] Armed Services Board of Contract Appeals Case No. 62377

Topics: Compliant Accounting Infrastructure, Incurred Cost Proposal Submission (ICP/ICE), Contracts & Subcontracts Administration, DCAA Audit Support, Government Regulations, Federal Acquisition Regulation (FAR)

At the end of each of the DCAA audit programs for contractor business systems, DCAA discusses what it refers to as “Less Severe Significant Deficiencies.” These are clearly deficiencies which do not meet the DFARS definition of a “Significant deficiency.”[1] As a result, the withhold requirement provided for in DFARS 252.242-7005 cannot be applied.

Topics: Compliant Accounting Infrastructure, Contracts & Subcontracts Administration, DFARS Business Systems, DCAA Audit Support, Contractor Purchasing System Review (CPSR), Government Regulations, Federal Acquisition Regulation (FAR)

As more and more companies are acquiring companies or being acquired, a predominant question that arises is can I do work with my new or existing affiliates. The simple answer is yes, but there are specific requirements in the FAR on how transactions are performed between affiliates. The requirements of intercompany transactions are found in two primary cost principles FAR 31.205-26 – Materials Costs and FAR 31.205-36 Rental Costs.

Topics: Compliant Accounting Infrastructure, DFARS Business Systems, DCAA Audit Support, Government Regulations, Federal Acquisition Regulation (FAR)

This is the third blog in a three-part series on progress payments for Government contractors. In this blog we will discuss the estimate to complete, and the adjustments needed when there is a projected loss on a contract.

Topics: Compliant Accounting Infrastructure, Contracts & Subcontracts Administration, DFARS Business Systems, Government Regulations, Federal Acquisition Regulation (FAR), Estimating System Compliance

This is the second blog in a three-part series on progress payments. This blog addresses Line 5, Contract Price and Line 11, Total eligible costs on the SF1443 Contractor’s Request for Progress Payment Form.

Topics: Compliant Accounting Infrastructure, Contracts & Subcontracts Administration, DFARS Business Systems, Government Regulations, Federal Acquisition Regulation (FAR)

This is the first blog on a three-part series on progress payments and discusses progress payments and the applicable rates.

Topics: Compliant Accounting Infrastructure, Contracts & Subcontracts Administration, DFARS Business Systems, Government Regulations, Federal Acquisition Regulation (FAR)

DCAA issued some guidance on PPP forgiveness treatment in the form of frequently asked questions (FAQs) to its auditors. The FAQs were not front and center on DCAA’s website but search on “PPP” did find them at: COVID FAQ for PWS 07142021 (dcaa.mil).

Topics: Compliant Accounting Infrastructure, Incurred Cost Proposal Submission (ICP/ICE), Small Business Compliance, Contracts & Subcontracts Administration, DCAA Audit Support, Defense Procurement & Acquisition Policy (DPAP), Government Regulations, COVID-19, Paycheck Protection Program (PPP) Loans, Federal Acquisition Regulation (FAR)