PNWC’s Government Contracting Update - page 48

This week we’ve been discussing the contract closing process – the steps required to close out a flexibly-priced contract. It is not a simple, straight-forward or perfunctory process. The Government, especially administrative contracting officers spend a lot of time ensuring that all the paperwork is in order. Contractors should also be prepared to spend a fair amount of effort doing the same.

Source: PNWC’s Government Contracting Update: Contract Close-Out Process – Part 4

Back in the old days, DCAA (Defense Contract Audit Agency) audited final vouchers (or completion vouchers). These were not “audits” in the true sense of the word but auditors would trace direct costs back to contracts’ job cost records and ensure that the contractor applied the appropriate indirect rates for each year. They would then check to see what the contractor had already been paid to date to ensure the difference between incurred and billed equaled the amount of the final voucher. DCAA would then issue a report to the ACO (Administrative Contracting Officer) stating that the amounts claimed on the final voucher agreed with the contractor’s books and records and it was up to the ACO to perform all of the other administrative closeout tasks, the most difficult usually being the reconciliation with Government disbursement records. Back then, Government finance records at anything below the contract level (e.g. CLIN, ACRN, etc) were notoriously inaccurate.

Source: PNWC’s Government Contracting Update: Contract Close-Out Process – Part 3

Yesterday in Part 1 of this series, we discussed the various tasks that the ACO (Administrative Contracting Officer) must complete before they can be considered “administratively complete”. There are a lot of them. Today, we look at one of the tasks that contractors must perform in order to close out a contract – the “completion voucher”.

Source: PNWC’s Government Contracting Update: Contract Close-Out Process – Part 2

Now that DCAA (Defense Contract Audit Agency) has essentially caught up with auditing or administratively closing contractor incurred cost submissions, there is a flurry of activity by contracting officer to close out contracts needing final indirect rates.

Source: PNWC’s Government Contracting Update: Contract Close-Out Process – Part 1

Why do companies bother to appeal contract awards when they lost out on consideration because they couldn’t follow clear solicitation instructions? And then they concoct some kind of scenario to make it look like the Government was at fault, or incompetent. We can’t state that such appeals are never successful but we can’t think of a case where such appeals were successful.

Source: PNWC’s Government Contracting Update: Another Example Where Failure to Follow Clear Solicitation Instructions Leads to Lost Opportunities

The allowability of costs under Government contracts are generally covered by the cost principles contained in FAR Part 31 and the FAR supplements issued by various departments. For example, the DOD FAR Supplement (DFARS) adds additional coverage for public relations, compensation, independent research and development and bid and proposal costs, insurance and indemnification, legislative lobbying costs, external restructuring costs and most recently, costs related to counterfeit electronic parts and suspect counterfeit electronic parts. The Department of Energy FAR Supplement (DEAR) contains additional coverage for independent research and development and bid and proposal costs, insurance and indemnification, pre-contract costs, professional and consultant service costs, and costs relating to legal and other proceedings. The NASA FAR Supplement (NFS) adds additional coverage for compensation and pre-contract costs. And we could go on and discuss other agencies added requirements.

Source: PNWC’s Government Contracting Update: Know Your Contract Terms

DCAA (Defense Contract Audit Agency) has made outstanding progress in reducing its incurred cost backlog – so much so that the prohibition against the Agency performing audits for non-DoD agencies until it caught up on its incurred cost backlog, was lifted last October. Most of this backlog reduction was a result of DCAA’s new-found risk-based approach to auditing. Under a risk-based approach, DCAA uses certain criteria to categorize contractors into high risk or low risk. Those classified as low risk are dumped into a nation-wide pool and only one percent get selected for audit. The remaining 99 percent are closed without audit. Clearing out the incurred cost backlog therefore was fairly easy because there were far fewer audits to perform.

Source: PNWC’s Government Contracting Update: DCAA Involvement in Contract Close-out Process

The Army Corps of Engineers (COE) issued a solicitation in 2016 for dredging services. The COE received three timely bids but after reviewing them, determined all three were unreasonably high priced compared to the Government estimate. The Government estimate was $14 million whereas the three bids were $18, $19, and $21 million. Because all three bids exceeded the Government estimate by more than 25 percent, the COE could not (or did not) make an award.

Source: PNWC’s Government Contracting Update: Protest Denied Where Contractor Failed to Follow Established Procedures

Companion bills were introduced in the House and Senate to repeal the Davis-Bacon Act. In the House, H.R. 743 – Davis-Bacon Repeal Act was introduced by Rep Steve King (R-IA) and in the Senate, S. 244 – Davis Bacon Repeal Act was introduced by Sen Mike Lee (R-UT). Both bills, introduced on January 30, 2017 read the same.

Source: PNWC’s Government Contracting Update: Bills Introduced to Repeal the Davis-Bacon Act

On January 30th, the President signed an Executive Order (EO) that requires Agencies to cut two existing regulations for every new rule introduced. Yesterday, three public advocacy groups – The Natural Resources Defense Council (NRDC), the Communications Workers of America, and Public Citizen – joined together to file a lawsuit in the U.S. District Court for the District of Columbia alleging that Executive agencies cannot lawfully comply with the President’s two for one order because doing so would violate the statutes under which agencies operate. The suit asks the court to issue a declaration that the order cannot be lawfully implemented and to bar Agencies from implementing the order.

Source: PNWC’s Government Contracting Update: Groups File Lawsuit Challenging the President’s Two-for-One Order