Government Contractor’s Domestic Production Activities Deduction Upheld
Generally, to be eligible for the domestic production activities deduction (DPAD), a taxpayer must earn gross receipts from a disposition of qualifying production property. This typically involves a sale and delivery of a manufactured product by the taxpayer to a customer. However, the IRS recently ruled that a government contractor made a disposition for DPAD purposes despite the fact that title to the property reverted back to the contractor (Technical Advice Memorandum 201314043, 04/05/2013). The ruling disposition was not requiring
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DoD publishes FINAL Defense Business Systems Rule; Treasury Issues Internet Payment Platform Proposal
The Defense Department published in the Federal Register the final rule on Defense Business Systems, effective immediately. The rule makes fourteen changes to the current interim rule; of significance:
- DFARS 215.407-5-70(d) is removed. The criteria for maintaining an acceptable estimating system have been relocated to the clause at 252.215-7002, Cost Estimating System Requirements.
- DFARS 242.302(a)(4) has been deleted and an additional contract administration function to approve or disapprove contractor business systems has been added at DFARS 242.302(a)(S-74).
- The term “cost” has been replaced by “cost-reimbursement,” as appropriate, in DFARS 242.7000(b)(1) and DFARS 252.242-7005(e). Continue reading »
DoD Revises Procedures for Approving Interim Invoices
The Department of Defense (DoD) is proposing to amend the DFARS (Defense Federal Acquisition Regulation Supplement) to document the current practice of using statistical sampling to approve interim invoices. The rule clarifies that interim invoices not chosen as part of the sample to be reviewed will be considered provisionally approved for payment subject, of course to any later audit of the actual costs incurred. Continue reading »
Preparing for Your Audit – Practical Tips & Tricks
For many, your 2011 financial audit is coming quickly (if it hasn’t already started) and, with that, your friendly Aronson auditors! While we provide you with a Prepared by Client List (PBC), here are some tips to give you greater insight into what goes on in the minds of those crazy auditors and how you can make the audit process smoother for everybody involved.
- Auditors love to get all of their information all at once. They really like walking in that first day of an audit and seeing all of the information pulled and ready in the audit room, rather than piecemeal over a period of time. Continue reading »
Update: New Rules Increases Set-Aside Opportunities for Small Businesses
UPDATE (02/01/12): GSA is offering a free webinar, GSA Schedules and the Utilization of Small Business, on Thursday, 2/2/12. Join the Small Business Utilization training online, Thursday, February 2 at 1:00 pm EST and receive one continuous learning point (CLP). Learn how the FAR has changed to provide agencies with discretionary authority to set-aside orders against multiple award contracts for small business. Register at: http://interact.gsa.gov/gsa-training
The regulations governing small business set-aside contracts were, for the most part, written before multiple-award IDIQ contracts become so prevalent. Small business advocates have long believed the rising popularity of the multiple-award contracts amounted to a loophole of sorts that was harmful to small businesses. Effective November 2, 2011, the Federal Acquisition Regulations were amended to close the loophole. Contracting Officers are now authorized to: Continue reading »
Update: DoD Accelerates Payments to Small Businesses
The Department of Defense (DoD) adopted, as final, interim rule effective as of November 18, 2011, according to the Federal Register 76 FR 71468.
The Department of Defense (DoD) amended the Defense Federal Acquisition Regulation (DFAR) to accelerate payments to small businesses. Generally, the Government does not pay invoices earlier then required by the payment terms of the contract. This is true even if the invoice has been approved and is ready for payment. Cash management practices such as this one are also common in industry.
FAR Counsel Limits Use of Cost Reimbursement Contracts
Recent changes to the Federal Acquisition Regulation (FAR) should reduce the number of cost reimbursement contracts and ensure that cost reimbursement contracts that are awarded are effectively managed. FAR Case 2008-030, published on March 16th, 2011, modifies the FAR to (1)more clearly describe the circumstances when cost reimbursement contracts are appropriate. (2) require greater documentation for the need to award a cost reimbursement contract in both the acquisition plan and the procurement file, (3) ensure that adequate resources are available to award and administer the contract, and (4) consider multiple contract types where only one portion of the work needs to be cost reimbursement.
This is an interim rule so it is effective immediately but the FAR Counsel will accept comments until May 16th. Hopefully, the added administrative burden placed on contracting officers will not result in fixed price contracts being awarded when cost reimbursement would clearly be the better choice.
Subcontractor Data & Executive Compensation Information Publicly Available
For better or worse, the age of transparency has arrived. FAR 52.204-10 “Reporting Executive Compensation and First-Tier Subcontract Awards” was promulgated in July, 2010. The clause has been included in most Government contracts awarded since then and is being added to existing GSA schedule contracts. The clause requires prime contractors to report a variety of information regarding their first tier subcontractors and in many cases the compensation of the top 5 executives of the prime and subcontractor.
GSA Time-and-Material Contracts – New FAR Requirements Proposed
As the largest contracting body in the United States, the Federal Government is always concerned about the management of risk. The Governments preferred type of contract vehicle is fixed-price, which places the risk of cost overruns on the Contractor. When a fixed-price contract cannot be established, a time-and-material or cost reimbursable contract vehicle is used. The risk of cost overruns for these types of contracts falls back on the Government. Continue reading »
Bad Contractor Database to go Public
The information contained in the Federal Awardee Performance and Integrity Information System (FAPIIS), euphemistically known as the “bad contractor” database, will become become publicly available. Though access to FAPISS was originally limited to certain government employees, Congress has now directed the Office of Management and Budget Continue reading »
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What We Are Writing
- A Marriage of Inconvenience: GSA Schedule Contracts & The Contractor Code of Business Ethics & Conduct Clause
- Emerging Small Businesses: To Grow Your Business, You Must Plan For Growth
- Government Contracting: Look Before You Leap!
- GSA Schedules – Strategies for Success
- New Employee vs. Independent Contractor Considerations
- Pay on Display – Understanding the Executive Compensation and Subcontractor Data Reporting Requirements & Ramifications
- The GSA Schedule: Your Ticket to the Federal Market (May 2010)
- The New FAR Codes of Conduct and Compliance Program Provisions
- The Seven Deadly Sins (of contract compliance)