From a recent issue audit report from the GSA Office of the Inspector General the following statements were made:
"The OIG recognizes that it is the contracting officer's responsibility to negotiate and award a reasonable profit rate in accordance with the guidance provided under Federal Acquisition Regulation (FAR) 15.404-4-Profit. For presentation purposes, the OIG used a 10 percent profit rate to calculate the per audit labor rate for ABC's employees. We applied this factor because the vast majority of the sales analyzed were under T&M task orders, a contract type that typically carries a lower risk to the contractor."
"FAR 15.404-4 provides guidance on profit and states that T&M contracts should be treated in the same manner as cost-plus-fixed-fee contracts, which limits profit to 10 percent. In addition, our position is that subcontractor labor should be treated as a pass-through cost, and profit should not be applied to this labor type. This was then used to request a 32% reduction in rate for the labor category rates for the company. The OIG performed a cost build for the labor rates that were charged on task order contracts and independently reviewed base rates, indirect rates, & profit to determine what the actual target rate should have been."
The purpose of this webinar is to look at Fair & Reasonable pricing based upon the above stated approach and cover the following questions:
- Is FAR 15.404-4 an appropriate measure of the percentage of profit?
- Do you add a fee to manage subcontractor labor or is it straight pass through?
- GSA Schedule pricing structures (CPL vs Market Rates) : what is the impact of true historical rates usage?
- What are in your indirect rates? (Do you know)
- What is defective pricing?
- What are the legal ramifications of defective pricing?
Speakers:
Dismas Locaria, Partner, Government Contracts Practice, Venable LLP
Scott Davidson, CEO and Managing Principal, GCO Consulting Group
Michael Phipps, Principal, GCO Consulting Group
Gunjan Talati, Partner, Kilpatrick Townsend & Stockton LLP