What is Fair & Reasonable Pricing from a Contract Audit Point of View based upon FAR 15.404-4

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1 hour

From a recent issue audit report from the GSA Office of the Inspector General the following statements were made:

"The OIG recognizes that it is the contracting officer’s responsibility to negotiate and award a reasonable profit rate in accordance with the guidance provided under Federal Acquisition Regulation (FAR) 15.404-4-Profit. For presentation purposes, the OIG used a 10 percent profit rate to calculate the per audit labor rate for ABC’s employees. We applied this factor because the vast majority of the sales analyzed were under T&M task orders, a contract type that typically carries a lower risk to the contractor."

"FAR 15.404-4 provides guidance on profit and states that T&M contracts should be treated in the same manner as cost-plus-fixed-fee contracts, which limits profit to 10 percent. In addition, our position is that subcontractor labor should be treated as a pass-through cost, and profit should not be applied to this labor type. This was then used to request a 32% reduction in rate for the labor category rates for the company. The OIG performed a cost build for the labor rates that were charged on task order contracts and independently reviewed base rates, indirect rates, & profit to determine what the actual target rate should have been."

The purpose of this webinar is to look at Fair & Reasonable pricing based upon the above stated approach and cover the following questions:

Is FAR 15.404-4 an appropriate measure of the percentage of profit?
Do you add a fee to manage subcontractor labor or is it straight pass through?
GSA Schedule pricing structures (CPL vs Market Rates) : what is the impact of true historical rates usage?
What are in your indirect rates? (Do you know)
What is defective pricing?
What are the legal ramifications of defective pricing?

This webinar is presented by ...

The GCO Consulting Group advises government contractors and prepares them for success in both pre-award and post-award phases of Government Contracting. With our deep experience with contract regulations and compliance requirements, we support you throughout the entire process to maximize opportunities and mitigate risk in this highly regulated, complex environment.

About Our Experts

Dismas Locaria

Partner, Venable LLP

Dismas (Diz) Locaria is a member of the firm's Government Contracts Group. Mr. Locaria's practice focuses on assisting government contractors in all aspects of working with the Federal government. Mr. Locaria has extensive experience assisting clients with regulatory and contract/grant term counseling, compliance (including ethics and integrity compliance), responsibility matters, such as suspension, debarment and other contracting/grant exclusions, small business matters and GSA Federal Supply Schedule contracting. Mr. Locaria also represents and counsel’s clients with the peculiarities of the Homeland Security Act, including obtaining and maintaining SAFETY Act protections. Government Contract and Grant Counseling and Compliance: Mr. Locaria has a wealth of knowledge regarding applicable contract (e.g., the Federal Acquisition Regulation) and grant (e.g., OMB Circular A-110 and A-122) regulations, including the application of these regulations to both prime contractors/grant recipients and subcontractors/subgrantees.
Michael Phipps

Principal, GCO

Michael Phipps has over 20 years of commercial and public sector experience with a strong background in government contracting and has directed operations for corporations with onsite management in the United States, Middle East & Asia.
Mr. Phipps has proven experience managing business operations for international corporations, working in over 20 countries. During his career Mr. Phipps has worked on a variety of prime and subcontracts with experience in Project Management, Base Operations Support, Language Services, Logistics and Information Technology. Mr. Phipps has managed complex international programs and has led successful operations into some of the most volatile areas of the world.

Mr. Phipps served nine years in the U.S. Army Reserves and Active Duty and is a former US Army Ranger.

Mr. Phipps currently is the Chairman of the SBA’s Veteran Small Business Affairs Advisory Committee. Mr. Phipps also is a founding member of the American Legion’s Small Advisory Task Force, formed to educate The White House, Congress and The Legion Posts about Veteran’s business issues while developing methods and tools to assist veteran-owned small businesses.

University of Maryland University College
Master's Degree, Computer Systems Management

West Virginia University
Bachelor's Degree, Business
Gunjan Talati

Partner, Kilpatrick Townsend & Stockton LLP

Gunjan Talati is an experienced government contracts practitioner who regularly represents contractors in a variety of sectors, including aerospace and defense, health care, and technology. Gunjan’s practice is a mix of regulatory compliance, transactional, and litigation matters.

Gunjan’s regulatory compliance experience includes advising government contractors on complying with various Federal Acquisition Regulations, navigating small business and socioeconomic regulations and matters, addressing GSA and Federal Supply Schedule issues, and meeting ethics and compliance requirements. Gunjan also has significant experience in helping contractors navigate federal cybersecurity regulations and requirements.

Education
Catholic University of America Columbus School of Law, J.D. (2006)
Georgia Institute of Technology, B.S. (2003) with honors

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