Promoting Consistency in CEI and Field Service Contracts

1. Promoting Consistency in CEI and Field Service Contracts

2. What is the anticipated outcome? • A subcommittee to review current State DOT requirements, procedures, policies, expectations? • Add language to the audit guide? • Strengthen Internal Control Questionnaire?

3. DOT Concerns Firms propose a wide variety of items dirc. What type of DC’s are reimbursable? Reimbursing for vehicles? When to use field rates? Can per diem be paid? Reimbursement of Premium OT?

4. Consultant Concerns In general: • The Consultant request is to be made whole on direct costs, if not they are less profitable. Putting direct costs into overhead is not fair to other clients. • Cost needs to be fair and reasonable in order to be charged. • Management is responsible for how to account for costs… Many implications: • The Consultant needs to set up Policies and Procedures to be consistent across all clients and all project types. • A requirement of an adequate accounting system is proper segregation of direct and indirect costs. • Consultant must be compliant with: • CAS 402 (Consistency in allocating costs incurred for the same purpose) and • FAR 31.201, 31.202 and 31.203 (as it relates to Direct and Indirect Costs), • If necessary, compliance with a CASB Disclosure Statement, Part II – Direct Costs. • Compliant with the “executed” contract • State DOTs are inconsistent on what they allow to be reimbursed on projects

5. DOT – Consistency Difficult for Contracting Officers and Auditors to track allowable direct cost items per firm Do most firms charge phones, computers, paper, supplies, etc.? Audit reports are not always detailed enough to make a quick determination

6. Vehicle Reimbursement Federal mileage rate? Negotiated monthly amount including fuel? Negotiated monthly amount, fuel paid based upon mileage logs? Actuals, as long as they are fair and reasonable?

7. When to use Field Rates If job is solely in the field and lasts for more than one year? If firm is in client supplied office for 40 hrs/wk? If employee is always labeled “field” in firm’s records (included in Firm’s base as Field Labor).

8. Should DOT pay Per Diem? Depends on RFP and LOI? • Did firm indicate they had folks locally to do the work? • Urban or rural location? Depends on how long job lasts? Do any DOTs pay relocation expenses?

9. Premium Overtime A firm always has a choice but must be consistent! If a firm has a policy to charge direct, and the client refuses to pay, then should the DOT increase the overhead? If premium is identified separately in the OH, then DOTs should be able to adjust OH accordingly.

10. CAS 402 Firms must be consistent in their application of direct and indirect costs. If DOTs are not consistent, either a firm may lose money or be in violation of CAS 402.

11. Inconsistent DOT Policies Some States allow certain items to be billed direct, their neighbors may not.

12. Contact Info • toddjones@toddjonesconsulting.com • 919-417-1764 • Tony Machi • amachi@mbakerintl.com