Redstone Government Consulting Blog | Government Regulations (14)

DCAA has caught up on their incurred cost backlog and is concentrating effort on Truth in Negotiations Audits (i.e., Defective Pricing). The objective of the Truth in Negotiations audit is to determine whether a negotiated contract price was increased by a significant amount because a contractor did not submit or disclose current, accurate or complete cost or pricing data.

On October 4, 2021, the Department of Health and Human Services (HHS) proposed an amendment to its Federal Acquisition Regulation (FAR) Supplement to support the HHS Electronic Invoicing Implementation Project and HHS’s transition to the Department of the Treasury’s Invoice Processing Platform. This rule would add HHS Acquisition Regulation (HHSAR) Subpart 332.70 (which is comprised of HHSAR 332.7000 through 332.7003) Electronic Submission and Processing of Payment Requests to provide policies and procedures for these requests.

Wage Determination Clauses Can Bite You

What is the spookiest and scariest story for a government contractor? How about a story where the government imposes an expense on a contractor, but doesn’t allow for consideration of this expense in the contract value? So, in layman’s terms, losing money (profit) on government contracts. In a recent ASBCA decision, this is exactly what happened.

On June 24, 2021, the Armed Services Board of Contract Appeals (ASBCA) opinioned that Intellicheck, Inc., a subcontractor, did not have privity of contract or even an implied-in-fact contract with the Government to allow for the recovery of costs incurred by Intellicheck, Inc. to maintain and store Government property after the completion of a Task Order for the Navy. A tale as old as time, the Government lets years go by before taking action to dispose of its property being held by a subcontractor. Then finds a legal out for not paying the costs the Government caused to be incurred.

In 2017 Congress directed through the National Defense Authorization Act (NDAA) that changes be made to the treatment of independent research and development (IR&D) costs and required the Defense Contract Audit Agency to provide as part of its annual report to Congress both independent research and development and bid and proposal (B&P) costs expended by DoD contractors. Congress intended this change to apply to indirect costs incurred on or after October 1, 2017. The Defense Acquisition Regulation (DAR) Council must have read over that part.

This is the second of a two-part blog series where we tackle small business joint ventures and the SBA Mentor-Protégé Program. In this blog, we will discuss small business joint ventures and how a government contractor can get involved in one.

This is the first of a two-part blog series where we will tackle small business joint ventures and the SBA Mentor-Protégé Program. In this blog, we will discuss the SBA Mentor-Protégé Program.

In 2020 Congress directed through the National Defense Authorization Act (NDAA) that contracting officers be prohibited from determining that the price of a contract or subcontract is fair and reasonable based solely on historical prices paid by the Government. Congress goes on to provide that if the contractor fails to provide data supporting the proposed price, the contractor is ineligible for award, unless the head of the contracting activity (HCA) determines that it is in the best interest of the Government to make the award. Let’s face it they are saying contracting officer should be asking for “cost data.”

On July 9th, 2021, the Department of Defense (DoD)issued a final rule in the Federal Register to implement 10 U.S.C. 2330a which requires the DoD to establish a data collection system to provide certain management information about an awarded contract or task order that is valued in excess of $3 million. This new rule is applicable for the following service acquisition portfolio groups:

• logistics management services
• equipment-related services
• knowledge-based services
• electronics and communications services

You may read the entire rule here.

ASC 606, Revenue from Contracts with Customers, had an impact on the way many contractors recognized revenue related to contracts with the Federal Government. Redstone has covered this topic a couple of times (January 26, 2021 Government Contractor Challenges in 2021 Webinar and May 6, 2021 MossAdam/Redstone Webinar Compliance Changes for Government Contractors). ASC 606 also impacts the recognition of sales commissions. The overarching GAAP matching principle requires that the expense of sales be matched to the recognition of the related revenue.