Application of CAS to An ODC CLIN

CAS is applied to contracts and not CLINs. If the contract was subject to a CAS exemption then the entire contract is exempt. Conversely, if the contract was not exempt from CAS then the entire contract is subject to CAS, including FFP CLINs.

The notion that cost-type contracts are subject to CAS and FFP type contracts are not subject to CAS is, in a word, wrong. There is an exemption for FFP contracts awarded on a competitive basis without submission of certified cost or pricing data, but that's the only one that keys off contract type. There are other exemptions but they are unrelated to contract type (e.g., small business concerns).

Hope this helps.

Piggybacking on what H2H wrote, all contracts are subject to the CAS unless an exemption applies.  The exemptions are contained in the CAS Board's rules, not Part 30 of the FAR.

Thank you for your responses.  We are a developer of commercial software, and the items on contract are commercial items, therefore, based on my interpretation of the regs, we are exempt from CAS.  In my almost 35 years in this field, I have never seen a KO take this position and I wanted to make sure I wasn't missing something.

Is the contract being issued as a T&M contract for a commercial item?

Ginnybax,

You are correct. The contracting officer is wrong.

Yes, the contract is being used for for T&M commercial services.  The CLIN was for labor hours, but the KO is now changing it to T&M and is now adding the travel money back into the K to the T&M CLIN by a mod.

Is FAR 52.212-4 Alt I in the contract?

Yes, FAR 52.212-4 Alternate 1 is in the contract.

Note that under 52.212-4 Alt I, travel is reimbursed at actual cost, but not subject to the cost principles of FAR Part 31.  Also, while indirect costs can be applied to ODC's, a lump sum is negotiated for indirect costs at contract formation.  Indirect costs are not based on actual costs and are not adjusted as they are under 52.216-7, which is not used in contracts for commercial items.  Hopefully, the contracting officer did not include 52.216-7 in the contract.

No, the KO didn't.  Thanks all, for your help!