Académique Documents
Professionnel Documents
Culture Documents
March 2008
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CAS Policies and Procedures FAR Part 30 Effective March 31, 2008
Defines desirable change as a compliant change rather than a unilateral change by a contractor. The Cognizant Federal Agency Official (CFAO) shall request and consider the advice of the auditor as appropriate Material changes and noncompliances must be resolved using FAR 30 procedures rather than less formal techniques The CFAO must evaluate detailed cost impact proposals promptly Equitable adjustments for required or desirable changes must be negotiated as provided in the Changes clause of the contract Provides for netting of cost impacts that affect both cost estimating and cost accumulation A recommendation to allow combining impacts from multiple changes was not adopted No changes to Increased costs in the aggregate
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Legal defense costs in a criminal proceeding were unallocable and therefore unallowable. The legal costs were found to be too remote to satisfy the FAR benefit test (in another case, legal costs were allocable under CAS 410 criteria). Sales commissions were allocable and allowable as indirect costs because the contractor treated sales commissions as indirect costs (G&A) consistently. The costs of a cabin used by employees for recreation purposes were allowable under the pre October 1995 rules and unallowable afterward. Patent amortization costs were expressly unallowable when not required by the contract. Penalties government bears the burden of proving expressly unallowable costs, sufficiently colorable claims are not expressly unallowable and penalties must be waived if the claimed expressly unallowable costs are $10,000 or less.
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Gains and Losses on the Disposition of Assets (Lockheed Martin Corp., ASBCA No. 54169, October 11, 2007) Proceeds from the sale of both depreciable and non-depreciable assets must be apportioned for purposes of recognizing gains and losses Extraordinary treatment provisions of CAS and FAR are optional CAS 409 requires that gains and losses be assigned to the year in which the disposition occurs In a real estate transaction, the intent of the buyer was considered in apportioning proceeds between depreciable and non-depreciable assets CAS 418 Materiality and Burden of Proof (AM General LLC, ASBCA Nos. 53610 & 54741, February 23, 2007) The government failed to furnish evidence sufficient to establish a noncompliance with CAS 418 The burden of proof in CAS cases rests with the Government Materiality was not assessed
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Allocating Residual Home Office Expenses using the Three Factor Formula (CAS 403)
The 3FF is optional unless the contractor is CAS covered and residual expenses as a percentage of aggregate operating revenue exceed: 3.35% of the first $100 million; .95% of the next $200 million; .3% of the next $2.7 billion; and .2% of all amounts over $3 billion The 3FF takes into account three broad areas of management concern: employees, business volume and capital invested Under the 3FF, a segment receives the arithmetic average of three percentages compared to the total organization: Payroll dollars Operating revenue including amounts charged to other segments and excluding amounts charged by other segments Average net book value of tangible capital assets plus inventories (excluding property held for leasing) DCAA survey conducted in February 2008 gathers contractor information about components of inventory, treatment of government vs. commercial contracts and differences in treatment of contract types (FFP, CPFF, etc.)
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Indefinite Delivery / Indefinite Quantity Contracts Value for applicability and full vs. modified coverage minimum, maximum or best estimate Delivery orders Stand alone or cumulative Year of CAS award Hybrid Contracts Exemptions for separate contract line items, e.g., commercial items, firm fixed price line items based on adequate price competition Value for applicability and full vs. modified coverage Christian doctrine full vs. modified (also, reverse Christian doctrine) Documentation for exemptions Adequate price competition on firm fixed price contracts Commercial item components
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Other Regulations
Limitation on Pass Through Charges (DFARS Interim Rule Effective April 26, 2007) for DoD proposals. Contractors must:
exclude excessive pass through charges (defined as those that cannot be proven to the CO to add substantive value in accomplishing the work performed under the contract); identify the percent of effort performed by each subcontractor; for proposals with more than 70% subcontract effort - identify the amount of indirect costs and profit applicable to subcontracts and - describe the value added as related to the subcontractor work; FFP and FFP with economic price adjustment contracts and subcontracts are exempted for commercial items or if the award is based on adequate price competition; and Flow-down the clause to non-exempt subcontracts.
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Legislative Items
DoD FY 2008 Authorization Act
Limitations on procurement of commercial items and services Under Sections 805 and 815, contractors must submit sufficient information to justify price reasonableness to qualify commercial services or items The terms general public and nongovernmental entities do not include federal, state, local or foreign government Report of Contractor Ethics Programs of Major Defense Contractors (Section 848) - description of program components - disclosure of personal financial interests and outside employment of key personnel - conflict mitigation for personal conflicts of interest - procedures for reporting conflicts and mitigation procedures - protection for Whistleblowers
Contractor Accountability Proposed Legislation Tax compliance Disclosure of legal and administrative proceedings for purposes of responsibility determinations Other disclosures
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Self Governance Code of Business Ethics and Conduct FAR 52.203-13 and 52.203-14
Contracts subject to the new rules:
Contracts issued on or after December 24, 2007
Contracts expected to exceed $5 million (including options) Contract period of performance expected to exceed 120 days Applies to subcontracts, issued under covered prime contracts
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Requirements
Within 30 days of contract award, contractors must:
Formalize written code of business ethics and conduct Provide code to all employees who perform on covered contract
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GSA Contractors
Subject to new rules
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Satisfactory record of integrity and business ethics as a qualification standard Cause for debarment or suspension for knowing failure to disclose overpayments or violation of federal criminal law Mandatory disclosure of suspected violations of criminal laws committed during award or performance of contract or subcontract Minimum standards for internal control systems
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