PNWC’s Government Contracting Update - page 35

What does it take to close out a contract? A lot, actually. FAR (Federal Acquisition Regulations) 4.804-5 lays out the steps that must be completed before a contract can be officially closed. Although the process is within the responsibility of the contract administration office, most of the steps require some involvement or input by the contractor. Let’s look at some of the steps:

1. Disposition of classified material is completed
2. Final patent and royalty reports are cleared
3. There are no outstanding value engineering change proposals
4. Plant clearance report is received
5. Property clearance is received
6. All interim or disallowed costs are settled
7. Price revision is completed
8. Subcontracts are settled by the prime contractor (don’t underestimate this requirement)
9. Prior year indirect cost rates are settled
10. Termination docket is completed
11. Contract audit is completed
12. Contractor’s closing statement is completed
13. Contractor’s final invoice has been submitted, and
14. Contract funds review is completed and excess funds deobligated.

Source: PNWC’s Government Contracting Update: The Contract Closeout Tsunami

The Department of Veterans Affairs issued an RFP (Request for Quotation) for courier services for the Boise VA Medical Center lab, pharmacy, and radiology departments. Six offerors submitted bids and ultimately, the VA awarded the contract to FG Management Group(FGMG). Crosstown Courier Service Inc (Crosstown), one of the other five bidders protested the award to FGMG alleging that FGMG was not in compliance with applicable limitations on subcontracting requirements.

Source: PNWC’s Government Contracting Update: Bid Protest Denied – Limitation on Subcontracting

KBR, Inc. announced late last month the appointment of Lieutenant General Wendy Masiello, USAF (Ret) as a member of its Board of Directors, effective August 18th. That’s about a month and a half after she retired as head of the Defense Contract Management Agency (DCMA) where she was responsible for the oversight of KBR’s Government contracts. Ms. Massiello will serve on the Audit and the Health, Safety, Security, Environment and Social Responsibility  Committees of the Board. As a Board Member, she will earn at least $200,000 per year in cash and stock.

Source: PNWC’s Government Contracting Update: Revolving Door – DCMA Commander Goes to KBR, Inc.

Companies that desire Government contracts must meet a number of qualifications including an accounting system suitable for Government Contracting and enough financial resources to perform the contract. From a practical standpoint where a contractor is eligible for progress payments or other interim payments (e.g. public vouchers), a two to three months of working capital is sufficient until the billing/payment pipeline starts producing.

Source: PNWC’s Government Contracting Update: Just Because You’re Bankrupt Doesn’t Mean You’re Precluded from Government Contracting

The Department of Veterans Affairs issued a solicitation for a contractor to handle EEO claims investigations at its Office of Resolution Management. One of the bidders, David Jones CPA (DJCPA) was eliminated from consideration because the VA found that one of his line item prices was not fair and reasonable.

Source: PNWC’s Government Contracting Update: Government’s Price Analysis was Deficient – Bid Protest Sustained

When national emergencies or disasters such as floods and hurricanes occur, supplies and services need to be procured and rushed to the affected areas quickly.

To expedite this process, the System of Award Management (SAM), which all Government contractors are familiar with, contains a Disaster Response Registry as required by FAR 4.11 (SAM registration for disaster services not required by encouraged) and FAR 26.2 (preference for local firms – no carpetbaggers).

Source: PNWC’s Government Contracting Update: Are You in the National Disaster Response Registry?

Last week, Senator McCaskill (MO) wrote a letter to the Secretary of Defense in her position as ranking member of the Homeland Security and Governmental Affairs Committee requesting information regarding DoD’s efforts to improve the collection and reporting of improper payments.

Source: PNWC’s Government Contracting Update: DoD Not Doing Enough to Reduce Improper Payments – Seemingly

Nazik Modawi and her husband Abboud Wali started a company called Rides Inc.in the Philadelphia area to provide non-emergency transportation services to the aged and people with cognitive and developmental disabilities. By all accounts, the company was successful, growing from three vans to more than 40 vans averaging 600 trips per day. The couple wanted more however. They wanted to get in on some of the largess spewed by the Federal Government and in particular, the Department of Transportation.

Source: PNWC’s Government Contracting Update: Couple Thinking They Were Paying an Expedited Processing Fee Now Charged With Bribery

Well, it looks like more of DCAA’s (Defense Contract Audit Agency) is going away. The FAR (Federal Acquisition Regulation) Councils are about ready to raise the audit threshold for termination settlement proposals.

Source: PNWC’s Government Contracting Update: Threshold for Audit of Termination Proposals Set to Substantially Increase

Did you know that the Government can terminate your contract at any time for any reason? Well, so long as there is no bad faith or a clear abuse of discretion that is. Every Government contract has a termination for convenience clause. These clauses are found at FAR 52.249-1 through -10, depending upon the type of contract. Although these clauses are not mandatory flow down clauses for subcontractors, prime contractors would be taking undue risk if they don’t flow them down to their subcontractors  – if the Government terminates the prime, the prime will certainly need to do the same to its subcontractors.

Source: PNWC’s Government Contracting Update: Terminations for Convenience and Bad Faith by the Government