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Waiting for the final government audit may be too late

July 23, 2018 By Andrew Smith

In a case of first impression, a Court of Appeals has held that a government subcontractor’s claim for reimbursement of its actual indirect costs was time-barred.

Fluor Fed’l Solns. LLC v. PAE Applied Techs, LLC, No. 17-1468, 2018 WL 1768233 (4th Cir. Apr. 12, 2018) (per curiam) (unpublished).  It is the first case to directly address the interplay between the Allowable Cost and Payment Clause of the Federal Acquisition Regulation (FAR), 48 C.F.R. § 52.216-7, and a statute of limitations.  It highlights the risks government subcontractors face when they choose to wait for a Government audit rather than litigate promptly after a payment dispute arises.

This case involved a long-term subcontract and a long-delayed government audit.  In 2002, Fluor and PAE entered into a federal government subcontract that ultimately spanned a 15-year performance period. The subcontract incorporated, with minor changes, the FAR Allowable Cost and Payment Clause, 48 C.F.R. § 52.216-7, found in most cost-reimbursable federal government contracts and subcontracts. That clause requires the Government (or, in this case, the prime contractor, PAE), to pay Fluor’s “anticipated final” indirect rates in accordance with the contract terms, subject to retroactive adjustments once a government audit establishes the subcontractor’s final indirect rates applicable to the contract. 48 C.F.R. § 52.216-7(e)–7(g).

Keep reading this article at: https://www.insidegovernmentcontracts.com/2018/07/waiting-final-government-audit-may-late/

Filed Under: Contracting Tips Tagged With: allowability, allowable costs, audit, direct and indirect costs, FAR, indirect rate, payments, subcontracting, unallowable costs

Contractor agrees to pay half-million dollars to settle False Claims Act allegations relating to unallowable costs on Army contract

February 13, 2018 By Andrew Smith

Integral Consulting Services, Inc. has agreed to pay the United States $505,838 to settle False Claims Act allegations that it submitted false claims to the government by inflating certain indirect cost rates in connection with work performed on a Department of the Army contract.

Integral Consulting Services, Inc. (ICS) is a Maryland-based company that provides IT solutions to federal government agencies and commercial organizations.  The services ICS provides range from biometric technologies to enterprise IT management and development of software applications.  In 2012, ICS was awarded an Army contract, W911W5-12-D-0002, under which it was required to provide the Army’s National Ground Intelligence Center’s Biometric Intelligence Program with identity intelligence analysis support.

The civil settlement agreement resolves allegations that from on or about May 1, 2012 through June 27, 2014, ICS took costs and expenses it and its employees incurred in connection with litigation arising out of a teaming agreement with another contracting company and included the costs and expenses in the General and Administration (G&A) indirect cost pool that was spread amongst ICS’s various government contracts, including Army Contract Number W911W5-12-D-0002, and submitted to the United States government.  The inclusion of such costs had the effect of inflating the claims paid by the Army to ICS.

The civil settlement resolves United States ex rel. Amit Dalal v. Integral Consulting Services, Inc., Civ. No. GJH-14-2529 (D. Md.), a lawsuit filed by a relator under the whistleblower provision of the False Claims Act.  The Act permits private parties to file suit on behalf of the United States for false claims and obtain a portion of the recovery by the United States. As part of the civil resolution, the relator will receive approximately $92,315.

Source: https://www.justice.gov/usao-md/pr/defense-contractor-agrees-pay-over-half-million-dollars-settle-false-claims-act

 

Filed Under: Contracting News Tagged With: Army, DoD, DOJ, false claims, False Claims Act, G&A, indirect rate, IT, Justice Dept., qui tam. whistleblower, teaming agreement, technology, unallowable costs

5 things you must do after winning a contract

September 26, 2016 By Andrew Smith

DCAA_EmblemThe recent limitation imposed on the Defense Contract Audit Agency to perform audits means private sector accounting firms now have the opportunity to work more closely with federal agencies to help assess proposals, indirect rates, and business systems of qualifying government contractors.

This change has elevated the need for accountants specializing in government contracting who fully understand the criteria federal agencies use to select and retain contractors.

Compliance and efficiency are paramount to not only achieving the government’s goals, but also for contractors to maximize their own opportunities afforded by a federal contract.  With that in mind, we’ve identified the top five areas government contractors need to shore up to ensure their services are efficient and profitable.

Keep reading this article at: https://washingtontechnology.com/articles/2016/09/12/insights-williamson-after-winning.aspx

Filed Under: Contracting Tips Tagged With: audit, contract administration, DCAA, direct and indirect costs, indirect rate, proposal

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