Cost Reimbursement | The Contracting Education Academy

August 12, 2016 By AMK

GAO sustains protests of $17.5 billion DISA contract

Encore III, a controversial contract before the Defense Department began soliciting bids from industry to purchase up to $17.5 billion in IT services, received its strongest rebuke yet – this time from the Government Accountability Office.

The contract supports the department’s Joint Information Environment, a massive IT modernization project to globally connect the military services and defense agencies to supply “information on demand,” as the RFP states.

GAO announced last week it upheld pre-award bid protests from contractors CACI and Booz Allen Hamilton on grounds that the Defense Information Systems Agency (DISA) – the Pentagon’s IT arm – failed on two grounds “to provide a reasonable basis for comparing the cost of competing proposals.”

Keep reading this article at: http://www.nextgov.com/defense/2016/08/gao-sustains-bid-protests-175-billion-disa-contract/130519

January 29, 2015 By AMK

Audit: HHS failure to screen Obamacare contract recipients cost taxpayers $400M

Not even good enough for government work.

An internal investigation into how the federal government awarded contracts for developing and building the Affordable Care Act’s most important public element — the online exchanges that were to be used by millions of Americans to purchase health insurance — has found the process was fraught with obvious and expensive errors.

The Department of Health and Human Services (HHS) failed to conduct background checks on prior work by companies awarded many of the Obamacare contracts and failed to require those same companies to be accountable for cost overruns, leaving taxpayers on the hook instead.

The report published Jan. 22, 2015 by the Office of the Inspector General for HHS concludes those mistakes soaked taxpayers for more than $400 million in unexpected costs — essentially doubling the expected cost of building the exchanges in the first place.

Keep reading this article at: http://watchdog.org/194839/obamacare-contracts-cost-taxpayers/

July 18, 2014 By AMK

Not following interim DoD rule may be costing taxpayers billions

A new report from the U.S. Department of Defense found that Navy and Marine Corps contracting personnel may be subjecting billions of dollars to waste due to non-compliance with cost reimbursement regulations.

According to the department’s internal watchdog, of 170 contracts reviewed, valued at about $7.7 billion, 135 of them, valued at about $7.54 billion were in question because contracting personnel did not consistently implement the Federal Acquisition Regulation (FAR) revision, called the interim rule.

“As a result, contracting personnel continue to issue cost-reimbursement contracts that may increase DoD’s contracting risks because cost-reimbursement contracts provide less incentive for contractors to cut costs,” the Inspector General wrote in the report.

Keep reading this article at: http://www.washingtontimes.com/news/2014/jul/12/defense-dept-contracting-personnel-may-be-wasting-/

January 8, 2014 By AMK

Cost-reimbursement contracts could save DoD money on systems acquisition, paper says

The Defense Department (DoD) could improve its acquisition process by relying more on cost-reimbursement contracts for systems developments, among other things, a Dec. 17, 2013 Center for the Business of Government paper says.

The report, is authored by former Under Secretary of Defense for Acquisition, Technology and Logistics Jacques Gansler and University of Maryland professor William Lucyshyn.

“The DoD has made numerous attempts to reform its acquisition system over the last 50 years,” the authors say. “These initiatives, combined with many in Congress, have produced only modest improvements.”

The DoD periodically embraces fixed-price development contracts in an effort to control cost growth and shift more of the responsibility and risk to the contractor, the paper says.

Keep reading this article at: http://www.fiercegovernment.com/story/cost-reimbursement-contracts-could-save-dod-money-systems-acquisition-paper/2013-12-19

September 6, 2013 By AMK

Army contracting personnel weren’t aware of contracting rule

Army contracting personnel didn’t adhere to a new rule during their work on contracts worth about $10.5 billion because they weren’t aware of it, a report from the Defense Department office of inspector general says.

The rule, first implemented on an interim basis in March 2011, affects cost-reimbursement contracts, where contractors are paid for costs incurred during the fulfillment of the contract–as opposed to fixed-price contracts. Under the Federal Acquisition Regulation, a cost-reimbursement contract is acceptable only when uncertainties surrounding the contract prevent an accurate estimate of its cost.

The rule requires that DoD contracting personnel obtain approval for cost-reimbursements contracts at one level above the contracting officer or higher. They also have to document that approval.

Additionally, contracting personnel have to justify the use of a cost-reimbursement contract and document its potential to transition to a fixed-price contract. The rule also requires documentation that there are adequate resources to manage a cost-reimbursement contract.

The interim rule became a final rule, without significant changes, in March 2012, but the OIG audit only covered the nearly year-long period where it was still an interim rule.

Keep reading this article at: http://www.fiercegovernment.com/story/army-contracting-personnel-werent-aware-contracting-rule/2013-08-27

Encore III, a controversial contract before the Defense Department began soliciting bids from industry to purchase up to $17.5 billion in IT services, received its strongest rebuke yet – this time from the Government Accountability Office.

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