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FINAL RATES TRAINING

FINAL RATES TRAINING. FINAL RATES TRAINING. Requirements Uses Final rate calculation Process and Time Line Real-time review Unallowables and penalties Negotiation Quick closeout and Indirect Cost Ceilings Exercise and Summary Discussion of your issues. Requirements.

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FINAL RATES TRAINING

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  1. FINAL RATES TRAINING

  2. FINAL RATES TRAINING • Requirements • Uses • Final rate calculation • Process and Time Line • Real-time review • Unallowables and penalties • Negotiation • Quick closeout and Indirect Cost Ceilings • Exercise and Summary • Discussion of your issues

  3. Requirements • Contractors required to submit • Proposals due within 6 months of end of fiscal year • Certification of allowability of costs

  4. USES FOR FINAL RATES • Adjust billing rates on cost-reimburseable contracts • Make contract closeout possible for cost-reimbursable contracts • Negotiate final prices on fixed-price incentive or fixed-price redeterminable contracts

  5. FINAL RATE DETERMINATION • Determined by dividing negotiated indirect cost by negotiated base • Unallowable costs are removed from the pool • Unallowable costs are included in the G&A base

  6. REVIEW AND NEGOTIATION PROCESS • ACO Negotiated Rates • Submission • Audit review • Pricing review • Negotiation • Audit Determined Rates • Submission • Audit Review • Notification of Determined Rates • If disagreement, Form 1 issued • If Contractor appeals, becomes ACO-negotiated

  7. TIME-LINE • Major/Non-major contractors • 6 months for proposal • 12/24 months for audit • 6 months for negotiation • Background for time limits • Contract Audit Follow-Up (CAFU)

  8. Methods to Enable Timeliness • Multi-year reviews • Real-time rates • Screening for unallowables • Roll forward

  9. UNALLOWABLE COSTS • Expressly unallowable costs • Unallowable by agreement • FAR Part 31.205

  10. PENALTIES • FAR 42.709 • Expressly unallowable • Unallowable through mutual agreement • ACO responsibility • Amounts

  11. NEGOTIATION • ACO responsibility • May be delegated • Immaterial questioned costs • Does it move the rate? • Protect future position

  12. QUICK CLOSEOUT RATES • FAR 42.708 • Requirements for use • Definition of relatively insignificant • Waivers • Use

  13. INDIRECT COST CEILINGS • Cost-sharing arrangement • New or recently reorganized companies • Unreasonably low rates • Must not move costs to other contracts

  14. EXERCISE • Read over carefully • Work in teams • Determine rates • Explain position to class

  15. SUMMARY • Requirements and uses • Determination of rate • Process • Unallowables and penalties • Negotiation • Quick Closeout and Indirect Cost Ceilings

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