December 2017

Would you like to forestall the Government from taking exception to certain items of costs?  If so, consider an advance agreement.

The extent of allowability of costs covered by the cost principles in FAR Part 31 applies broadly to many accounting systems in varying contract situations. Thus, the reasonableness, the allocability and the allowability under specific cost principles of certain costs may be difficult to determine. To avoid possible subsequent disallowance or dispute based on unreasonableness, unallocability or unallowability, FAR 31.109 encourages contractors and contracting officers to seek advance agreement on the treatment of special or unusual costs.

SOURCE: Negotiating Advance Agreements on Specific Items of Cost

DOE (Department of Energy) contractors are subject to more audit oversight than the typical Government contractor and that includes DoD (Defense). And there is good reason for that – DOE awards massive cost-type contracts to operate its facilities and clean up its nuclear messes. To ensure that the taxpayers interests are protected, DOE has developed a “Cooperative Audit Strategy” with these guiding principles:

SOURCE: What is the Energy Department’s “Cooperative Audit Strategy”

In many circumstances, the Government will award “commercial contracts”. Usually, under commercial contracts, it is contractors’ responsibility to provide all resources necessary for contract performance including financing. However, Government regulations also recognize that in some markets, the provisions for financing by the buyer is a commercial practice.

SOURCE: Contract Financing on Commercial Contracts

If you were in the military back in the day and needed something but couldn’t get it because the item was not in stock or you weren’t authorized to have it, you could sometimes call on a crusty master sergeant to conjure it up. Indeed, one would marvel at that ability to secure something when all other avenues failed. Movies and novels have included such abilities and these master sergeants were praised for finding a way improve comforts, logistics, or save lives. Where did they develop such unique skills and abilities? Perhaps things weren’t so much on the “up and up”.

SOURCE: Navy Makes Unauthorized Purchases – Contractors Go To Prison