slide1 l.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
Subcontracting Issues Under GSA Schedules PowerPoint Presentation
Download Presentation
Subcontracting Issues Under GSA Schedules

Loading in 2 Seconds...

play fullscreen
1 / 29

Subcontracting Issues Under GSA Schedules - PowerPoint PPT Presentation


  • 543 Views
  • Uploaded on

Subcontracting Issues Under GSA Schedules. Breakout Session #1203 Barbara S. Kinosky, Esq., Centre Consulting, Inc. James S. Phillips, Esq., Centre Consulting, Inc. April 7, 2009 10:30am–12:00 p.m. Challenging Issues.

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Subcontracting Issues Under GSA Schedules' - jory


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
subcontracting issues under gsa schedules
Subcontracting Issues Under GSA Schedules

Breakout Session #1203

Barbara S. Kinosky, Esq., Centre Consulting, Inc.

James S. Phillips, Esq., Centre Consulting, Inc.

April 7, 2009

10:30am–12:00 p.m.

challenging issues
Challenging Issues

Contractor teaming arrangements (CTAs) vs. Prime/Sub: the differences and their impacts

How to bill and be Billed as a GSA Schedule subcontractor

New DOD Authorization Act subcontracting requirements

Mandatory vs. non-mandatory flow downs & audit rights

Small business subcontracting plan compliance & reporting

ctas vs prime sub
CTAs vs. Prime/Sub

What’s the Difference?

CTA: All teammates are selling off their own Schedule.

Prime/Sub: All teammates are selling off the Prime’s Schedule!

ctas vs prime sub5
CTAs vs. Prime/Sub

What’s the Difference?

Prime/Sub: Only the “Prime” has privity with the Gov’t customer.

CTA: All teammates are “Primes” with “privity” to the Gov’t customer.

But one may act as “team leader” for invoicing and management purposes of the convenience of the Gov’t.

ctas vs prime sub6
CTAs vs. Prime/Sub

Issue #1: Who Pays/Reports IFF?

Prime/Sub: Prime reports all sales and pays IFF.

CTA: Presumption is that each teammate separately reports and pays IFF on their “share” of the sales.

Important to address this in the teaming agreement!

ctas vs prime sub7
CTAs vs. Prime/Sub

Issue #2: Prime Markups

Prime/Sub: Prime sets the mark-up on teammate work subject to price limits of Prime’s Schedule.

CTA: Leader may bill for entire team but can never bill more than applicable teammates Schedule rate/price.

Compensation to leader needs to be addressed in teaming agreement.

ctas vs prime sub8
CTAs vs. Prime/Sub

Issue #3: Is a Commercial Discount Involved?

Problem: GSA considers dealings between a Sub & a Prime to be a “commercial” transaction –

If Sub bills prime below its own GSA rate it may trigger a price reduction!

Unless Prime has LOA to buy for Gov’t off Schedule

ctas vs prime sub9
CTAs vs. Prime/Sub

Is A Commercial Discount Involved?

Prime/Sub: Clearly a commercial transaction that could trigger a price reduction.

CTA: Not a commercial transaction! But many Gov’t auditors get it confused.

ctas vs prime sub10
CTAs vs. Prime/Sub

Issue #4: Small Biz Set Asides

Prime/Sub: Prime must be small and must do >50% of work on TO or BPA.

CTA: All teammates must be small and “team” must do >50% of the work on TO or BPA.

fy 2009 defense authorization act clean contracting provisions subcontracting
FY 2009 Defense Authorization Act “Clean Contracting Provisions”: Subcontracting

Mandates FAR changes limiting use of multiple tiers of subcontractors

Applies only to civilian agency contracts (reaction to Hurricane Katrina stories)

FAR amendment must limit use of subcontractors that add “no or negligible value”

FAR amendment must ensure that higher level subcontractor cannot receive indirect costs or profit for work performed by lower level subcontractor unless higher level subcontractor adds value

Section 866

new mandatory contractor compliance program and integrity reporting
New Mandatory Contractor Compliance Program and Integrity Reporting

FAR changes applicable to contractors and subcontractors receiving awards over more than $5 million and in excess of 120 days

Exception for commercial item contractors and small businesses

Applicable to both domestic contracts and contracts performed entirely overseas

new mandatory contractor compliance program and integrity reporting15
New Mandatory Contractor Compliance Program and Integrity Reporting

Mandatory written codes of business ethics

Codes must be provided to employees

Mandatory internal control systems within 90 days after contract award

Rules became effective 12/12/08

gsa mentor prot g program17
GSA Mentor-Protégé Program

Proposed rule would amend GSAR to establish a GSA mentor-protégé program designed to encourage GSA prime contractors to assist small businesses, small disadvantaged businesses, women-owned small business, veteran-owned small business, and HUBZone small businesses.

gsa mentor prot g program18
GSA Mentor-Protégé Program

A large prime contractor would be eligible to serve as a mentor if it is:

Currently performing under at least one approved subcontracting plan within the last 5 years; and

Able to provide developmental assistance that will assist protégé.

t m rules subcontracting under far 16 idiq contracts
T&M Rules & Subcontracting Under FAR 16 IDIQ Contracts

FAR 16 provides for Multiple & Confusing Solutions

Rule #1: T&M for commercial services

(FAR 52.216-31) - Prime & Subs bill at Prime’s rate.

Rule #2: T&M for non-commercial services with competition (FAR 52.216-29) - Prime & Subs bill at blended rate.

Rule #3: T&M for non-commercial services without competition (FAR 52.216-30) - establish separate bill rates for Prime & each Sub.

the new t m rule subcontracting
The New T&M Rule & Subcontracting

What’s the Rule for GSA Schedules?

All Subcontractor labor that meets the qualifications of a Schedule labor category may be billed at the Schedule holders’ Schedule rate.

See FAR 52.212-4, Alt I.

gsa prime sub flowdown audit issues
GSA Prime/Sub Flowdown & Audit Issues

Mandatory Flowdowns Per FAR Part 12

Utilization of small business concerns (FAR 52.219-8)

Equal employment opp (FAR 52.222-26)

Affirm. action for disabled Vets (FAR 52.222-36)

Affirm. action for disabled workers (FAR 52.222-36)

Preference for privately owned US flagged vessels (FAR 52.222-41)

Service Contract Act (FAR 52.222-41)

gsa prime sub flowdown audit issues22
GSA Prime/Sub Flowdown & Audit Issues

Other “Desirable” Flowdowns

Termination rights

Changes rights

Gov’t audit rights

Buy America/Trade Agreement Act obligations

Any requirements imposed on the Prime by the Government

gsa prime sub flowdown audit issues23
GSA Prime/Sub Flowdown & Audit Issues

Special Subcontractor Audit Issues

Products: Buy America & Trade Agreements Act compliance

Services: Time keeping and labor qualification compliance

small biz subcontracting plans
Small Biz Subcontracting Plans

ISSUE #1 - Compliance

Applies to large businesses only

Plans set forth goals that contractor is to strive to achieve in performing GSA task order awards

GSA is relatively inflexible in negotiating the “goals”. Views requirement as an SBA mandate

Plans become a contract requirement whereby large business must exercise & demonstrate “good faith” in pursuing socio-economic goals

small biz subcontracting plans25
Small Biz Subcontracting Plans

Compliance Response

Annual reports of goal achievement to be submitted to GSA – individual subcontract report (i.e., the former SF 294).

Failure to achieve goals subjects contractor to potential audit of whether it exercised “good faith” in pursuing goals.

Be prepared to demonstrate “outreach” efforts if goals aren’t met.

small biz subcontracting plans26
Small Biz Subcontracting Plans

Issue #2 – Reporting

Historical issue: ordering agencies want credit for subcontracting on GSA task orders.

GSA’s position is that ordering agencies should not require subcontracting plans on GSA task orders.

GSA claims including a subcontracting plan on a task order is an illegitimate modification to the terms of the schedule contract - double counting.

small biz subcontracting plans27
Small Biz Subcontracting Plans

Other Issues – FFATA Reporting

FAR 52.204-10 reporting subcontract awards

Implements the Federal Funding and Accountability Transparency Act

Contractors required to report subcontracts over $1 million to www.esrs.gov

subcontracting issues under gsa schedules29
Subcontracting Issues Under GSA Schedules

Thank You!

bkinosky@centreconsult.com

jphillips@centreconsult.com