CAS Applicability

I defer to @here_2_help on all things related to cost principles and CAS, but Nash & Cibinic, Cost-Reimbursement Contracting, ch. 8, sec. II.A.6 (beginning at page 661 of the Third Edition) suggests to me that a post-award contract change does NOT make the subcontract subject to CAS.  The text cites Comment 6 to the policy published at 37 Fed. Reg. 4139 as authority.  I'll try to hunt down the reference.

EDIT:

It reads in relevant part:

Quote

The Board is persuaded that for the time being it should not cover negotiated modifications to contracts exempt at their inception.  It has, therefore, eliminated coverage for the time being of such contract modifications.  In doing so, however, the Board intends that the annual extension of existing negotiated contracts and similar contract modification would not be exempt from the Board's rules, regulations, and Cost Accounting Standards.

37 Fed. Reg. 4139, 4141 (Feb. 29, 1972).  See also DCAA's Contract Audit Manual at 8-103.4:

Quote

Contract modifications made under the terms and conditions of the contract do not affect its status with respect to CAS applicability. Therefore, if CAS was applicable to the basic contract, it will apply to the modification. Conversely, if the basic contract was exempt from CAS, the modification will also be exempt regardless of the amount of the modification. However, if the contract modification adds new work it must be treated for CAS purposes as if it were a new contract. In this case, if the modification exceeds the threshold, it will be CAS-covered (see CAS Working Group Paper 76-2).

Excellent research Jacques, thank you !

Perhaps the more interesting question is whether, when the subcontractor was acquired, that drove a change in CAS coverage.  I couldn't find anything on point, but it wouldn't surprise me if folks analogized to the normal rule that business size is determined at the time of the sub’s proposal in support of the subcontract, so becoming large does not result in a change of coverage either.  I'm speculating though.  If I'm reading your facts right, the exception you were relying upon at time of award was the subcontractor's status as a small business.

I also don't know how the fact an ID/IQ contract is involved might affect the analysis.  I assume the subcontract isn't an ID/IQ, but I suppose it could be.  I understand that for ID/IQs, the "expected value" at the date of award is considered the contract value, which I understand to be the ceiling (or maximum).  I suppose an increase to that ceiling could be "new work" for purposes of CAM ¶ 8-103.4.  Sorry for all the speculation.

you are correct, but task orders would have to be new work, would they not?  It's not as though dozens of task orders are in the multi millions of dollars with several large DoD prime contractors and none of them are CAS covered due to the ceiling minimum value of the IDIQ?

general_correspondence said:

you are correct, but task orders would have to be new work, would they not?  It's not as though dozens of task orders are in the multi millions of dollars with several large DoD prime contractors and none of them are CAS covered due to the ceiling minimum value of the IDIQ?

I'm not following.

Are you asking whether a task order within scope of its basic, issued within the ordering period, and for an amount that is consistent with the ceiling of that basic, would be "new work" for purposes of CAM ¶ 8-103.4?  If that is your question, I would say, no, that task order probably isn't "new work."

If you're asking whether a modification of the basic contract to expand its technical scope, its ordering period, or its ceiling would be treated as "new work" for purposes of CAM ¶ 8-103.4, I would say, that contract modification likely qualifies as "new work."  Whether something qualifies as "new work" can be a fact-intensive thing, but it is a term we use in contracting quite often.

the minimum value of the IDIQ ceiling is $10K.  As stated, this is minimum ceilings at this IDIQ. 

We were awarded a 24M task order a few months after the base IDIQ was awarded. FAR 52.230-2 is in the IDIQ contract, and the task order release states the parent IDIQ clauses apply.

I am the subcontracts manager.  I issued a subcontract a little over 2M.  The subcontractors 2M order is part of our overall 24M task order contract.  We will increase the subcontractors order by 100K, CAS was not applicable at the time of the subcontractors award, but they are no longer a small business,

Do I notify the contracting officer we have a CAS covered contract once I modify the subcontractors contract?

General, you do not have a CAS covered subcontract.  This is the definition of "small business" from the CAS Board's rules "Small business, as used in this part, means any concern, firm, person, corporation, partnership, cooperative, or other business enterprise which, under 15 U.S.C. 637(b)(6) and the rules and regulations of the Small Business Administration in part 121 of title 13 of the Code of Federal Regulations, is determined to be a small business concern for the purpose of Government contracting."  For purposes of your task order, the subcontractor is a small business under the SBA rules.  Additionally, what CAS rule would you apply to say that the subcontractor is no longer a small business for purposes of your TO?

Retread

the small business was acquired by a large business 6 months ago, shortly after we awarded them their subcontract ?

Under the SBA rules, which the CASB adopted for the definition of a small business, they are still a small business.

Retread, I trust your right,  BUT - they were only small because of the NAICS code of the work?  All other NAICS they operate under they were a large business. (I should have mentioned that in the OP) Also, the research Jacques did with the Cibinic & Nash, seems reasonable not to continue to keep documenting this large business as a small business forever?  No?

No.  Size is determined by the NAICS code assigned to a procurement.  The fact that a concern may be large under one NAICS code but small under another is irrelevant to whether the concern qualifies as a small business under a procurement using the NAICS under which the concern is a small business.  If it qualifies as a small business under the NAICS code assigned to a procurement, it is a small business under that action.  See, 13 CFR 121.402.

It's fairly settled that CAS applicability is determined at the time of contract award. The only unknown here is whether the contract type of the subcontract award was IDIQ. If yes then the IDIQ was issued to a small business which makes all task orders subsequently awarded exempt from CAS. I don't like it but thems the rules.

The subcontract is not an IDIQ.

general_correspondence said:

The subcontract is not an IDIQ.

Then the issue revolves around when the subcontractor is required to make its size representation.  If the $100K effort would be treated as "new work," then the original small business representation is irrelevant.  If the $100K effort is being added to the original subK effort and is within scope of the original subK effort, then you can rely on the original small business representation.

Thank you Jacques, I think that makes sense, but are you implying that when its time to renew their annual representations and certifications to us, this subcontract suddenly switches to a CAS covered contract, requiring a notice to both supplier and contracting officer?

general_correspondence said:

are you implying that when its time to renew their annual representations and certifications to us, this subcontract suddenly switches to a CAS covered contract, requiring a notice to both supplier and contracting officer?

I will let Jacques speak for himself on this, but the representation that is relevant is the representation as to the subcontractor's size when it submitted its proposal for the subcontract.  The size of the subcontractor is determined then and generally applies for the life of the contract (but see FAR 52.219-28).  If the subcontractor later changes its representations in SAM to reflect that it is no longer a small business, that does not effect the validity of the size representation made pre-contract award.  Further, this does not change the terms of the subcontract.  See, 13 CFR 121.404(g).

general_correspondence said:

Thank you Jacques, I think that makes sense, but are you implying that when its time to renew their annual representations and certifications to us, this subcontract suddenly switches to a CAS covered contract, requiring a notice to both supplier and contracting officer?

ANNUAL reps and certs have nothing to do with it.  You might want to look at FAR Part 19 on when, for long-term contracts, contractors are required to REREPRESENT their size.  My point is that you cannot rely on an old representation of size to support an out-of-scope modification (or at least that's my going in position until someone shows me otherwise).

Whether the subcontract is CAS-covered is made at the time of the award of the subcontract.  That said, there are limits on your ability to avoid coverage by awarding "new work" through a modification.  If the effort represents "new work," then you should ask for a new size representation as part of the subcontractor's proposal for the $100K effort.

EDIT:

That said, you may be able to avoid CAS coverage by relying on another exception.  As the $100K effort is under the TINA threshold, then the exception at 48 CFR 9903.201-1(b)(2) would apply.  There may be other exceptions (like 48 CFR 9903.201-1(b)(7)).  At least that seems to me to be the implication of the following sentence from the CAM quoted above:  "However, if the contract modification adds new work it must be treated for CAS purposes as if it were a new contract."

taking out the small/large business aspects of this original post, would the IDIQ award we received from the government that has a $10,000 minimum IDIQ Value,

determine all or any subcontracts awarded under the Prime contractors task orders be exempt from CAS coverage?  Said another way, assume we get a task order and we included a large business in our Bid, - would this large business be subjected to CAS?

general_correspondence said:

taking out the small/large business aspects of this original post, would the IDIQ award we received from the government that has a $10,000 minimum IDIQ Value,

determine all or any subcontracts awarded under the Prime contractors task orders be exempt from CAS coverage?  Said another way, assume we get a task order and we included a large business in our Bid, - would this large business be subjected to CAS?

I assume you're asking whether the large business's subcontract would be CAS-covered.  The rule is essentially the same for subcontracts as for prime contracts.  In other words, you look at the four corners of the subcontract and ask, is this subcontract CAS-covered?

You have mentioned the minimum a few times, and I don't understand why.  For a given IDIQ, the maximum or ceiling is what is used, not the minimum.  But that would be the case only for IDIQ contracts, and you've said the subcontract isn't an IDIQ.    I worry I'm making matters more confusing than they need to be, so I'll stop talking now.

Don't feel as though you are confusing things, it's hard to be crystal clear writing back and forth in chat rooms, the fact its regarding FAR and contracts makes it even more cloudy 😄

 so here's the thing, 

As I mentioned, I work in Subcontracts, and although I'm fairly certain subcontractors (large business)  we outsource to under the aforementioned conditions will be CAS covered if the $ exceeds 750K, the contract documents and review documents at the contract level, indicate NO CAS, and that is exactly correct because when awarded an IDIQ with ceiling of $10,000, CAS is not applicable.  However IDIQ's are the vehicle for task orders, and so here we are.  Is the large business I subcontract under a task order where the dollar value is >750K, be a CAS covered subcontract? 

I can't get answers from our own compliance or contracts people to these questions, I am good with the answers you an several others gave me regarding the small business that was acquired by a large business scenario, so I'm down to this final question of CAS applicability to the prime's subcontractor under a task order under an IDIQ that was awarded w/ $10,000 ceiling, and documented by the Primes internal team as "NO CAS" required.

Your latest post still has me concerned that you are not looking solely at the subcontract, and a $10K ceiling or maximum seems so low that I'm not sure we're talking about the same thing.  I recommend you review the slides here, which includes a decision tree on page 8.  Perhaps seeing it phrased differently will help.  You might also take a look at Appendix 3 to the CPSR Guidebook.

EDIT:  If your employer has a contracts library, Nash & Cibinic, Cost-Reimbursement Contracting, ch. 8, sec. II is useful.  If you have back issues of the Briefing Papers, take a look at Roger N. Boyd & Jeffrey M. Villet, "Cost Accounting Standards Fundamentals," 96-12 Briefing Papers 1 (Nov. 1996).

P.P.S. (9 Mar 20):  Just for the sake of having all the references in one place, I just found an excellent article: Karen L. Manos & Darrell J. Oyer, "Defining 'Awards' and 'Net Awards' for CAS Coverage," 4-6 Government Contract Costs, Pricing & Accounting Report ¶ 46 (Nov. 2009).  It references 7 Nash & Cibinic Report 41 (July 1994).

$10,000 “CEILING”??? Do you mean $10,000 “minimum guarantee” or similar wording ???

Please note that a ceiling refers to a maximum value not a minimum value.

joel hoffman said:

$10,000 “CEILING”??? Do you mean $10,000 “minimum guarantee” or similar wording ???

Please note that a ceiling refers to a maximum value not a minimum value.

It looks like, in the seventh post in this thread, that General Correspondence says "As stated, this is minimum ceilings at this IDIQ."   Based on this, I'd guess the meaning to be "minimum guarantee" as the other dollar amounts mentioned are in excess of this.   GC, some IDIQs come with a minimum guarantee that says you'll get at least that much business from the contract, or just a check.  It ensures the contract wasn't a total waste of B&P resources.  I don't believe that minimum guarantee acts a trigger for anything else, like CAS. 

But maybe it means something else.  Maybe GC could provide a excerpt from the contract that puts the $10k into context.

General, have you read the CASB's rules to determine CAS applicability?  Per those rules, if a contract does not exceed the "TINA" threshold, it is not subject to the CAS.  The Truthful Cost or Pricing Data threshold is now $2M.  Thus, all contracts that do not exceed that value are exempt from the CAS.  Also, for IDIQ contracts, you have to look at the value of each order to determine if it is a CAS covered order.  If the order would be exempt from CAS coverage if it were a separate contract, the order is not subject to the CAS.  See FAR 30.001.

On ‎3‎/‎6‎/‎2020 at 4:38 PM, Retreadfed said:

Also, for IDIQ contracts, you have to look at the value of each order to determine if it is a CAS covered order.  If the order would be exempt from CAS coverage if it were a separate contract, the order is not subject to the CAS.  See FAR 30.001.

If true, that was the piece I was missing.  I don't understand how FAR 30.001 supports that conclusion, but you've been doing this a lot longer than I have.  In my defense, here's why I thought the IDIQ was the contract:  In 1 Accounting for Government Contracts--Cost Accounting Standards § 3.03[5] it states, at least in the context of prepriced IDIQs:

Quote

Under basic ordering agreements and basic agreements each purchase order is considered a contract. However, for an Indefinite Delivery contract the “expected value” at the date of award is considered the contract value.

* * *

However, unlike basic ordering agreements, the IDIQ award is the contract rather than the individual awarded task orders.

Sorry for the confusion.

EDIT:  I'm feeling a little less ashamed of my bad research, but just a little.  Volume 2 of the Section 809 Report, put out in 2018, recommends the CASB add guidance "for CAS applicability to hybrid contracts and indefinite delivery contract vehicles."  The Advisory Panel recommends:

Quote

Add specific guidance for indefinite delivery vehicles to CAS program requirements at 48 CFR 9903.201-1 that would determine CAS applicability at the time of order placement. Evaluate each order for CAS applicability on its own.

Vol. 2, at 145.  On 17 Jul 18, the CASB, when releasing a different rule, included a Q&A about "hybrid" and IDIQ contracts, stating,

Quote

The Board intends to review these issues more carefully to determine whether clarification of its rules is needed to ensure appropriate application of CAS coverage.

83 Fed. Reg. 33146, 33147 (July 17, 2018).  My earlier post made a big assumption that turns out wasn't well-grounded.  I didn't understand that at the time, but hopefully I wasn't grossly negligent.  While I'm an avid reader of WIFCON, apparently my memory is bad, as I completely forgot about this thread:  

EDIT (9 Mar 20):  While I've slept since the following 2011 thread, it seems particularly on-point:

Unless one stands on their head, a ceiling is above. A minimum is akin to a floor.

Jacques, look at the definition of "fixed price contracts and subcontracts.  30.001 includes within that definition "Orders issued under indefinite-delivery contracts and subcontracts where final payment is not based on actual costs incurred."  Similarly, within the definition of "flexibly priced contracts" are " Orders issued under indefinite-delivery contracts and subcontracts where final payment is based on actual costs incurred." Thus, orders under IDIQ contracts are considered as separate contracts.

Retreadfed said:

Jacques, look at the definition of "fixed price contracts and subcontracts.  30.001 includes within that definition "Orders issued under indefinite-delivery contracts and subcontracts where final payment is not based on actual costs incurred."  Similarly, within the definition of "flexibly priced contracts" are " Orders issued under indefinite-delivery contracts and subcontracts where final payment is based on actual costs incurred." Thus, orders under IDIQ contracts are considered as separate contracts.

Thanks so much.  Technically speaking, the definition at FAR 30.001 only applies to the use of those two phrases in FAR Part 30.  Those are at FAR 30.604(e) & (h) and FAR 30.605(d) & (h).  That said, I think the FAR Council agrees with you, judging from Comment 31 accompanying Federal Acquisition Circular 2005-1.  70 Fed. Reg. 11743, 11748 (March 9, 2005).

Jacques said:

Volume 2 of the Section 809 Report, put out in 2018, recommends the CASB add guidance "for CAS applicability to hybrid contracts and indefinite delivery contract vehicles."

This would be long overdue.  A couple of examples show the need for such guidance.  First, is the example of a contract that contains CLINs for commercial items, with the accompanying clauses, and CLINs for non-commercial items.  How is the value of this contract determined for CAS purposes?  Second, how do you determine the value of a requirements contract for CAS purposes?

Thanks for the help everyone

On ‎3‎/‎6‎/‎2020 at 2:38 PM, Retreadfed said:

Also, for IDIQ contracts, you have to look at the value of each order to determine if it is a CAS covered order.  If the order would be exempt from CAS coverage if it were a separate contract, the order is not subject to the CAS.  See FAR 30.001.

Oh, how I wish this statement were true. Unfortunately ….

The issue of proper calculation of the value of an ID/IQ contract for CAS applicability purposes has a long -- and to date, unsolved -- pedigree. The CAS Board has not seen fit to issue guidance and DCAA often takes the position that it is the max value of the ID/IQ contract that determines CAS applicability, not the value of the individual orders issued under the ID/IQ contract.

To be clear: nobody knows. And while Retreadfed's position is appealing, it's not based on anything that's enforceable. The cite to 30.001 is misleading because the definitions of fixed-price and flexibly priced contracts pertain to administration of CAS when the contractor (or subcontractor) makes a change and a cost impact must be calculated. The better cite is 30.201-1 ("CAS Applicability") -- which says NOTHING and simply refers the contracting officer to the CASB rules at 48 C.F.R. 9903.201-1. That CAS language says, in essence, "Negotiated contracts not exempt from CAS in accordance with 9903.201-1(b) are subject to CAS. Then 9903.201-1(b) lists the well-known CAS exemptions.

So we are back to: there is no authoritative guidance regarding how to value an ID/IQ contract for purposes of determining CAS applicability. We are all still waiting for the CAS Board to tell us how to do it. But don't hold your breath, because we've been waiting for 25 years.

H2H, you have misunderstood what I wrote.  While I agree that how you determine the value of an IDIQ contract is still unresolved, and an issue that the CASB needs to address, I was not talking about valuing an IDIQ contract.  I was talking about the application of the CAS to individual orders under an IDIQ contract.  I don't think you would advocate that an order for $10K under an IDIQ contract should be or is subject to full CAS coverage.  We have learned from the definition of "contract" in FAR 2.101, Kingdomware and other decisions that orders are considered to be contracts.  We cannot ignore those authorities when discussing the application of the CAS to orders under IDIQ contracts.

Retreadfed said:

H2H, you have misunderstood what I wrote.  While I agree that how you determine the value of an IDIQ contract is still unresolved, and an issue that the CASB needs to address, I was not talking about valuing an IDIQ contract.  I was talking about the application of the CAS to individual orders under an IDIQ contract.  I don't think you would advocate that an order for $10K under an IDIQ contract should be or is subject to full CAS coverage.  We have learned from the definition of "contract" in FAR 2.101, Kingdomware and other decisions that orders are considered to be contracts.  We cannot ignore those authorities when discussing the application of the CAS to orders under IDIQ contracts.

Thank you, but I stand by my post. Right now, until some authoritative body publishes something official, my position is that each order issued under an ID/IQ carries the same CAS coverage as the initial ID/IQ award. I believe my position is aligned with DCAA's position on the matter.

To be clear, my heart is with you. But my head is not.

@Retreadfed,

I'm not connecting the dots.

The definitions at FAR 30.001 recognize task and delivery orders as contracts. Check.

Kingdomware held that task and delivery orders are "contracts" as defined at FAR 2.101. Check.

Therefore, CAS applicability for IDIQ contracts is determined at the order level?

I don't see how you get to that conclusion by deduction. It seems like a hopeful inference.

On 3/9/2020 at 6:47 PM, here_2_help said:

I believe my position is aligned with DCAA's position on the matter.

H2H, I think you give too much credence to what DCAA thinks.  The CAM is riddled with inaccurate statements and only provides guidance to DCAA auditors. It is not an authoritative source for procurement information. Further, we have to look at the culture of DCAA to evaluate that guidance.  Based on my 15 years at DCAA Headquarters, the culture of DCAA is to squeeze contractors whenever possible.  If there is any question as to the interpretation of the FAR or CAS, DCAA will take the position that is least favorable to contractors.  Moreover, even if a question has been settled, if DCAA disagrees with it, DCAA will follow its own path.  For example, look at the issue of who has the burden of proof regarding the allowability of a cost.  It is well settled that the government has the burden of showing that a cost is unallowable.  However, if allowability is an issue in an audit, the audit report will frequently state that the contractor failed to show that the cost was allowable.  Similarly, look at how DCAA is reacting to the ASBCA's J.F. Taylor and Metron decisions concerning executive compensation.  DCAA simply refuses to accept the results of those decisions and treats them as invalid.

Retreadfed said:

H2H, I think you give too much credence to what DCAA thinks.  The CAM is riddled with inaccurate statements and only provides guidance to DCAA auditors. It is not an authoritative source for procurement information. Further, we have to look at the culture of DCAA to evaluate that guidance.  Based on my 15 years at DCAA Headquarters, the culture of DCAA is to squeeze contractors whenever possible.  If there is any question as to the interpretation of the FAR or CAS, DCAA will take the position that is least favorable to contractors.  Moreover, even if a question has been settled, if DCAA disagrees with it, DCAA will follow its own path.  For example, look at the issue of who has the burden of proof regarding the allowability of a cost.  It is well settled that the government has the burden of showing that a cost is unallowable.  However, if allowability is an issue in an audit, the audit report will frequently state that the contractor failed to show that the cost was allowable.  Similarly, look at how DCAA is reacting to the ASBCA's J.F. Taylor and Metron decisions concerning executive compensation.  DCAA simply refuses to accept the results of those decisions and treats them as invalid.

I agree with you regarding DCAA culture, even though I've not spent any time working at Fort Belvoir. It would be great if each Order under an ID/IQ carried its own CAS coverage, but I don't read anything authoritative as permitting that. I believe you are reading too much into the definitions at FAR Part 30, as I believe they apply to CAS administration at 30.6 not to CAS applicability, where the FAR expressly points the CO to the CAS regulations themselves (which, as I've pointed out above, don't address ID/IQ contracts at all). The definitions are used for calculating cost impacts since fixed-price and flexibly priced contracts have different approaches. The same definitions break out a single contract type (T&M) into fixed-price (T) and flexibly priced (M) for the same reason. I really do not believe those definitions were intended to guide COs in determining CAS applicability.

However, I don't think you and I are going to resolve this at WIFCON.

When I post here, I'm wary of giving answers/advice to posters that would lead them into a dispute. To be clear, I do not personally agree that the ceiling value of the ID/IQ determines CAS applicability. But I do believe that CAS applicability is determined at the time of contract award, and ID/IQ is certainly a type of contract (unlike BOAs). If we are going to assert that each Order carries its own CAS coverage, I think it's important to point out that that position is an aggressive interpretation with which DCAA is likely to disagree. Implementing that position could also lead to problems with CPSRs (as contractors must report CAS-covered awards and subcontract awards to their ACOs). It could lead to problems with calculating cost impacts (since contracts have to calculate the cost impacts on affected CAS-covered contracts).

If I were consulting to the poster, I might advise an aggressive position, so long as my client understood the risks. But since I don't have that ability here, I'm wary of doing so in an anonymous forum.

On 3/9/2020 at 7:02 PM, Don Mansfield said:

I'm not connecting the dots.

Let me see if I can help in this regard.  

The CASB was created in the early 1970s.  It established the 19 standards and the preambles to those standards.  However, the CASB went out of existence in the early-1980s.  In the interim, the FAR was promulgated effective April 1, 1984.  A few years after the original CASB went out of existence, Congress reconstituted the CASB.  Thus, we have two iterations of the CASB, the original CASB, and the new CASB.  

When the new CASB was created, it had to decide whether to keep the old CAS rules and standards or to start over.  The CASB decided to keep the old rules and standards with some tweaks.  Thus, when the new CASB adopted its rules and standards, it was aware of the definition of contract in the FAR.  This is significant because the CASB has not defined what is a contract in its rules.  Therefore, the FAR definition of what is a contract must be applied when interpreting the CAS.  Put another way, when the CASB uses the term contract, it means contract as defined in the FAR.  Consequently, a contract for CAS purposes includes orders under IDIQ contracts.

FAR 52.216-18 is required to be included in IDIQ contracts.  That clause says that orders under the IDIQ contract are subject to the terms and conditions of the IDIQ contract.  For CAS covered contracts, the CASB has promulgated certain clauses that are to be used in CAS covered contracts.  One of those clauses has been incorporated into the FAR as 52.230-2.  That clause applies to contracts subject to full CAS coverage and begins "Unless the contract is exempt under 48 CFR 9903.201-1 and 9903.201-2, the provisions of 48 CFR Part 9903 are incorporated herein by reference and the Contractor, in connection with this contract, shall-"comply with all applicable standards and file a disclosure statement.  Clearly, this language makes the remainder of the clause applicable if the "contract" is not exempt from CAS applicability.  By operation of FAR 52.202-1, contract as used in 52.230-2 includes task orders.  Thus, to parse 52.230-2 and 52.202-1, the former must be interpreted to read, "Unless the task order is exempt under 48 CFR 9903.201-1 and 9903.201-2, the provisions of 48 CFR Part 9903 are incorporated herein by reference and the Contractor, in connection with this task order, shall."

I hope this helps.

On ‎3‎/‎9‎/‎2020 at 5:47 PM, here_2_help said:

I believe my position is aligned with DCAA's position on the matter.

I have no doubt that you subjectively believe that, if DCAA were to take an official position on this question, it would be likely be one with which @Retreadfed would disagree.  My problem is that I have not been able to find any official DCAA position, and when I asked this question of DCAA through DCMA, I got the run-around.

Jacques said:

I have no doubt that you subjectively believe that, if DCAA were to take an official position on this question, it would be likely be one with which @Retreadfed would disagree.  My problem is that I have not been able to find any official DCAA position, and when I asked this question of DCAA through DCMA, I got the run-around.

I subjectively believe that, based on my experience dealing with DCAA auditors on this exact issue.

My experience mirrors that of H2H.  However, like Jacques, I can find no specific pronouncement in the CAM on how to determine the value of an IDIQ contract for CAS coverage purposes or the application of the CAS to individual orders under IDIQ or requirements contracts.  Similarly, I cannot find where DCMA has issued guidance on this issue.  Thus, it appears that individual auditors and ACOs are acting on their own when faced with the question of CAS applicability to orders under IDIQ contracts.  However, they seem to have a fairly consistent view on this subject.  Finally, I would appreciate it if anyone could point us to a definitive interpretation on the applicability of FAR 1.108(c) to IDIQ contracts.

Retreadfed said:

Therefore, the FAR definition of what is a contract must be applied when interpreting the CAS.  Put another way, when the CASB uses the term contract, it means contract as defined in the FAR.

FAR 2.101(a) states:

Quote

A word or a term, defined in this section, has the same meaning throughout this regulation (48 CFR chapter 1), unless-

           (1) The context in which the word or term is used clearly requires a different meaning; or

           (2) Another FAR part, subpart, or section provides a different definition for the particular part or portion of the part.

Nothing that I know of extends the applicability of the definitions in FAR 2.101 to 48 CFR Chapter 99.

Retreadfed said:

FAR 52.216-18 is required to be included in IDIQ contracts.  That clause says that orders under the IDIQ contract are subject to the terms and conditions of the IDIQ contract.  For CAS covered contracts, the CASB has promulgated certain clauses that are to be used in CAS covered contracts.  One of those clauses has been incorporated into the FAR as 52.230-2.  That clause applies to contracts subject to full CAS coverage and begins "Unless the contract is exempt under 48 CFR 9903.201-1 and 9903.201-2, the provisions of 48 CFR Part 9903 are incorporated herein by reference and the Contractor, in connection with this contract, shall-"comply with all applicable standards and file a disclosure statement.  Clearly, this language makes the remainder of the clause applicable if the "contract" is not exempt from CAS applicability.  By operation of FAR 52.202-1, contract as used in 52.230-2 includes task orders.  Thus, to parse 52.230-2 and 52.202-1, the former must be interpreted to read, "Unless the task order is exempt under 48 CFR 9903.201-1 and 9903.201-2, the provisions of 48 CFR Part 9903 are incorporated herein by reference and the Contractor, in connection with this task order, shall."

This is the same argument that I use--so I am in violent agreement. I just didn't see what the definitions in FAR 30.001 had to do with anything.

Have you had any success with this argument?

Quote

Obtain the PCO’s estimate of a reasonable quantity for indefinite delivery/indefinite quantity (IDIQ) contracts (FAR 16.500). IDIQ contracts are used to acquire supplies and/or services when the exact times and/or exact quantities of future deliveries are not known at the time of contract award. IDIQ contracts generally require the Government to order, and the contractor to furnish, at least a stated minimum quantity of supplies or services. Other considerations should include anticipated funding limitations by year; anticipated order dates; and whether the basic contract includes various contract types (cost-plus, fixed price) for task orders (for service) or delivery orders (for supplies). Proposal audits of IDIQ contracts should be completed in the same manner as any other proposal audit. The risk assessment should be based on the potential order types (cost vs. fixed) and estimated quantities to be ordered. When the PCO cannot provide a reasonable estimate of the potential orders, the maximum order value should be used.

DCAA CAM 9-103.1 d.(8) [Emphasis added.]

(Best I could come up with...)

Don Mansfield said:

Nothing that I know of extends the applicability of the definitions in FAR 2.101 to 48 CFR Chapter 99.

Don, FAR 52.230-2 is a clause drafted by the CASB and adopted by the FAR.  FAR 52.202-1 states in part that "When a solicitation provision or contract clause uses a word or term that is defined in the Federal Acquisition Regulation (FAR), the word or term has the same meaning as the definition in FAR 2.101 in effect at the time the solicitation was issued."  Thus, as a matter of contract interpretation, "contract" as used in 52.230-2 has the same meaning as "contract" in 2.101.

As for success in using this argument, fortunately, I have not had to make it yet, but am prepared to do so should the occasion arise.

Retreadfed said:

Thus, as a matter of contract interpretation, "contract" as used in 52.230-2 has the same meaning as "contract" in 2.101.

I agree. I thought you were trying to make the case that the definition necessarily applied to Chapter 99.

Thanks to what Bob Antonio uploaded to the Forum today, I was informed the CASB meeting today in DC is addressing the very issue I came up against.

general_correspondence said:

Thanks to what Bob Antonio uploaded to the Forum today, I was informed the CASB meeting today in DC is addressing the very issue I came up against.

Yep. Better 25 years late than never