Fixed Price | The Contracting Education Academy

August 21, 2018 By AMK

CAS Board clarifies commercial item exemption, but raises potential audit issue

After publishing a proposed rule more than five and a half years ago, the Cost Accounting Standards (CAS) Board on July 17, 2018 issued a final rule revising the CAS exemption for contracts or subcontracts for the acquisition of commercial items.

The final rule clarifies that the current CAS exemption for commercial items extends to all contract types listed in Federal Acquisition Regulation (FAR) 12.207. However, in doing so, it also creates a potential audit issue arising out of the conditions levied by FAR 12.207 on certain contract types.

FAR lists contract types the government may use to acquire commercial items, including firm-fixed-price (FFP) contracts in conjunction with award fee incentives or performance/delivery incentives, known as fixed-price incentive (FPI) contracts. The relevant CAS commercial item exemption states that certain types of contracts for the acquisition of commercial items are exempt from all CAS. CAS 9903.201-1(b)(6) lists various contract types, including FFP, fixed-priced with economic price adjustment, time-and-materials (T&M) and labor-hour (LH), but makes no mention of FPI contracts. This inconsistency is the result of various amendments over time by the FAR Council to FAR 12.207. The final rule amends the language in CAS 9903.201-1(b)(6) to exempt commercial item contracts and subcontracts authorized in FAR 12.207 from all CAS requirements. Look for this change to CAS 9903.201-1(b)(6) when the final rule becomes effective on August 16, 2018.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=726522

March 16, 2017 By AMK

GAO weighs in on the state of federal contracting

Contractors working with major federal agencies delivered $438 billion in products and services in fiscal 2015, a 24 percent decrease from fiscal 2011, according to a wide-ranging roundup from the Government Accountability Office.

The 66-page report titled “Contracting Data Analysis: Assessment of Government-wide Trends” said the drop-off occurred mostly at the Defense Department, which saw contracting go down by 31 percent in that timeframe.

Services contracts have now risen to 60 percent of total government obligations — 50 percent of Pentagon awards and 80 percent of those let by civilian agencies over the past five years, GAO said.

Such services as professional and management support to information technology needs were used most by the Air Force and Army, while the top civilian agencies procuring services (worth at least $10 billion) were the departments of Energy, Health and Human Services, NASA, Homeland Security and Veterans Affairs.

Keep reading this article at: http://www.govexec.com/contracting/2017/03/gao-weighs-state-federal-contracting/136082/

December 19, 2016 By AMK

DoD stuck with too many reforms and not enough staff

Congress is giving the Defense Department too many acquisition reforms and not enough employees to do the job, says one top Pentagon official.

pentagon-seal The leaders of the House and Senate Armed Services committees committed to reforming the bloated defense acquisition system a couple of years ago. So far they have devolved acquisition power to the military service chiefs and reduced paperwork burdens for program managers.

The 2017 defense authorization bill takes things a step further by splitting DoD’s chief acquisition officer position in two and putting an emphasis on fixed-price contracts. The bill does that all while mandating reductions in the Senior Executive Service and in headquarters staff.

Keep reading this article at: http://federalnewsradio.com/acquisition/2016/12/dod-stuck-many-reforms-not-enough-staff/

May 19, 2016 By AMK

Contracting reform tops list of Senate NDAA acquisition changes

After moving acquisition milestone authority to the services last year, the Senate Armed Services Committee now has contracting in its sights for reform in the 2017 defense authorization bill known as the National Defense Authorization Act (NDAA).

As the Defense Department continues to court traditionally non-defense companies, the Senate Armed Services Committee is trying to smooth contracting methods for them.

The committee’s version of the bill tried to wean DoD off of its reliance on cost contracts in favor of fixed price contracts.

“The whole culture of cost contracts cuts across everything. … Cost contracts are almost a drug,” said a committee staffer. “Really, what has happened over the course of decades is that the Department of Defense’s dependence on [cost contracts] has created some really, really negative incentives for the contractors and for the government.”

Keep reading this article at: http://federalnewsradio.com/defense/2016/05/contracting-reform-tops-list-senate-ndaa-acquisition-reforms/

November 11, 2014 By AMK

Agriculture agencies need better contract management, GAO finds

Three Agriculture Department agencies failed to use preferred contracts in the procurement of professional services for about two-thirds of the funds assigned for such purchases from fiscal 2009 to 2013, the Government Accountability Office found.

That amounts to about $783 million of the nearly $1.8 billion USDA set aside in that time frame for professional services contracts, according to GAO’s report. USDA’s Departmental Management, Food and Nutrition Service, and Forest Service account for about 70 percent of the department’s total obligations for professional service contracts, but only about 37 percent of the funds were awarded via performance-based, firm-fixed-price contracts, the kinds that the Federal Acquisition Regulation (FAR) and the Office of Management and Budget say should be used to the maximum extent possible.

Keep reading this article at: http://www.fiercegovernment.com/story/usda-departments-need-better-contract-management-gao-finds/2014-10-30

After publishing a proposed rule more than five and a half years ago, the Cost Accounting Standards (CAS) Board on July 17, 2018 issued a final rule revising the CAS exemption for contracts or subcontracts for the acquisition of commercial items.

Contractors working with major federal agencies delivered $438 billion in products and services in fiscal 2015, a 24 percent decrease from fiscal 2011, according to a wide-ranging roundup from the Government Accountability Office.

Congress is giving the Defense Department too many acquisition reforms and not enough employees to do the job, says one top Pentagon official.

After moving acquisition milestone authority to the services last year, the Senate Armed Services Committee now has contracting in its sights for reform in the 2017 defense authorization bill known as the National Defense Authorization Act (NDAA).

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