On May 4th, companion bills were introduced in the Senate and House that are designed to increase participation of small businesses in Government contracting. Both bills are titled the same – Assuring Contracting Equity (ACE) Act of 2017.
The Army awarded a sole-source commercial item contract to AAR Mobility Systems for environmentally controlled shelters which can be mounted on the Army’s family of medium tactical vehicle platforms. AAR had been manufacturing these shelters in various configurations for all services of the military for many years.
Source: PNWC’s Government Contracting Update: Commercial Item Determinations – Minor or Major Modifications
Alaska Aerospace Corporation (AAC) is a corporation fully owned by the State of Alaska. It operates a missile test facility on Kodiak Island (Alaska) that has been used by the Missile Defense Agency (MDA) and the Air Force.
Yesterday, NASA announced that it would no longer accept low-risk determinations issued by DCAA (Defense Contract Audit Agency) on its contractors where the preponderance of the work relates to NASA contracts. Although unstated, NASA’s rationale is apparent – not every agency is enamored with DCAA’s low-risk determination procedures and the resultant mass write-off of incurred cost dollars without any audit or oversight.
Source: PNWC’s Government Contracting Update: NASA Calls Foul on DCAA Low-Risk Determinations
The GAO (Government Accountability Office) issued a report yesterday claiming that DOE’s (Department of Energy) lax management and oversight of its contractors puts its contract management at a High Risk. The audit was requested by Senator McCaskill who was herself, at one time, an auditor. For example, the GAO noted that in November 2016, DOE contractors constructing a nuclear waste treatment plant agreed to pay $125 million to settle a lawsuit alleging, among other things, that a contractor improperly used federal funds for lobbying purposes.
Source: PNWC’s Government Contracting Update: DOE is Lax on Fraud
There are certain contract clauses that require contractors to prepare and submit “Quarterly Limitation on Payments Statements” (QLOPS). These typically include Price Redetermination contracts (see FAR 52.216-5 and -6) and Incentive Price Revision contracts (see FAR 52.216-16).
Source: PNWC’s Government Contracting Update: Quarterly Limitation on Payments Statements (QLOPS)
Senators Gary Peters (D-MI) and Susan Collins (R-ME) have introduced legislation to help protect small businesses from falling victim to fraud when they register to procure federal contracts. The “Procurement Fraud Prevention Act” would require small businesses to be notified that free assistance is available for help in procuring government contracts through federal programs. Free assistance is available through the various Procurement Technical Assistance Centers (PTACs) the Small Business Administration (SBA) and other organizations.
DCAA (Defense Contract Audit Agency) recently made its fiscal year 2016 Report to Congress available on its public website. This is the sixth annual report published by DCAA which is required by Statute and began during the time that DCAA was under intense scrutiny over the quality of its audits. This report, and all of the reports, highlights DCAA’s audit performance, recommendations to improve its audit processes, industry outreach activities, and key accomplishments.
Source: PNWC’s Government Contracting Update: DCAA’s Fiscal Year 2016 Report to Congress
FAR (Federal Acquisition Regulation) 31.205-41 provides criteria on which taxes are allowable and which taxes are not allowable under Government contracts (see Allowability of Taxes Under Government Contracts). State income taxes required to be and are paid (or accrued) in accordance with GAAP (Generally Accepted Accounting Principles) are specifically called out as allowable costs.
Source: PNWC’s Government Contracting Update: State Income Tax Paid by S-Corp or LLC Shareholders
Earlier this month, PBS ran a story about the high cost of university research, noting specifically that indirect costs add appreciably to those costs. According to PBS, the President proposed a $7 billion budget cut for the National Institutes of Health (NIH) over the next 18 months while Tom Price, the President’s Secretary of Health and Human Services said that he may find those savings in indirect expenses that funds the purchase of lab equipment and paying the electric bills.