PART 1831
CONTRACT COST PRINCIPLES AND PROCEDURES
TABLE OF CONTENTS
SUBPART 1831.2 CONTRACTS WITH COMMERCIAL ORGANIZATIONS
1831.205 Selected costs.
1831.205-6 Compensation for
personal services.
1831.205-670 Evaluation of
contractor and subcontractor compensation for service contracts.
1831.205-671 Solicitation
provision.
1831.205-32 Precontract costs.
1831.205-70 Contract clause.
PART 831
CONTRACT COST PRINCIPLES AND PROCEDURES
1831.205-6 Compensation for personal services.
1831.205-670 Evaluation of contractor and
subcontractor compensation for service contracts.
(a) The contracting officer must evaluate the
reasonableness of compensation for service contracts:
(1) Prior to
the award of a cost reimbursement or non-competitive fixed-price type contract
which has a total potential value in excess of $500,000, and
(2)
Periodically after award for cost reimbursement contracts, but at least every
three years.
(b) The contracting officer must ensure the
reasonableness of compensation is evaluated for cost reimbursement or
non-competitive fixed-price type service subcontracts under a prime contract
meeting the criteria in paragraph (a)(1) of this section where:
(1) The
subcontract has a total potential value in excess of $500,000; and
(2) The
cumulative value of all of a subcontractor's service subcontracts under the
prime contract is in excess of 10 percent of the prime contract's total
potential value.
(c) (1) Offerors must be required to
submit as part of their proposals a compensation plan addressing all proposed
labor categories. Offerors also must demonstrate in writing that their proposed
compensation is reasonable.
(2)
Subcontractors meeting the criteria in paragraph (b) of this section must be
required to comply with paragraph (c)(1).
(d) The contracting officer's preaward
evaluation of each offeror's and their subcontractors' compensation should be
done as part of, or in addition to DCAA audits, price analyses, or any other
means deemed to be necessary.
(e) The results of the contracting officer's
evaluation, including any excessive compensation found and its planned
resolution, must be addressed in the prenegotiation position memorandum, with
the final resolution discussed in the price negotiation memorandum.
(f) The contracting officer must ensure that the
reasonableness of compensation for cost reimbursement subcontracts meeting the
criteria in paragraphs (b)(1) and (2) of this section is periodically reviewed
after award, but at least every three years.
(g) The results of the periodic evaluations of
contractor and subcontractor compensation after contract award must be
documented in the contract file.
1831.205-671 Solicitation provision.
The contracting officer must insert a provision
substantially the same as the provision at 1852.231-71,
Determination of Compensation, in solicitations for services which contemplate
the award of a cost reimbursement or non-competitive fixed-price type service
contract having a total potential value in excess of $500,000.
1831.205-32 Precontract costs.
(1) Precontract costs are applicable only
to --
(i) Sole source awards, except those
resulting in firm-fixed price or fixed-price with economic price adjustment
contracts; or
(ii) Awards resulting from
broad agency announcements.
(2) The procurement officer is the approval
authority for the use of precontract costs. Authorization must be in writing
and shall address the following:
(i)
the necessity for the contractor to initiate work prior to contract award.
(ii) the
start date of such contractor effort.
(iii) the total
estimated time of the advanced effort.
(iv) the
cost limitation.
(3) Authorization to incur precontract
costs must be provided to the contractor in writing and shall include the
following:
(i)
the start date for incurrence of such costs.
(ii) the
limitation on the total amount of precontract costs which may be incurred.
(iii) a
statement that the costs are allowable only to the extent they would have been
if incurred after formal contract award.
(iv) a
statement that the Government is under no obligation to reimburse the
contractor for any costs unless a contract is awarded.
1831.205-70 Contract clause.
The contracting officer must insert the clause
at 1852.231-70,
Precontract Costs, in contracts for which specific coverage of precontract
costs is authorized.