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  • Question

    My Weighted Guidelines has separate tabs for different years. Should using the Period of Performance be used to calculate the treasury rate? I use the treasury rate for the period of performance in 2011 based on date of asset receipt of 12/14/2011 (Treasury Rate - July to Dec 2011) at 2.500%. On a separate tab for 2012 for the period of performance in 2012 - the period of performance would be calculated from January 2012 to the time the proposal was received on 10/25/2012. This time period covers 2 separate treasury rate periods (January to June 2012 at 2.000%) and July to December 2012 at 1.750%. For determining the treasury rate for 2012 is it correct to use the treasury rate for the greater period of performance ie: January to June 2012 at 2.000% or is there a better way to determine the correct treasury rate for 2012 for when the period of performance covers more than one treasury rate period? Should I use the treasury rate in effect at the time the contract was issued instead of using period of performance for the repair ie: 11/23/2011 date of order = 2.500%. What is the correct way to determine this issue? Where is the correct procedure noted in the FAR or DFARS? I have reviewed FAR 31.205-10 and DFARS 215.404-71-4 and do not see reference to this specific question.


    Answer

    Per DFARS 215.404-71-4(c)(2)(v), use the same treasury rate as the contractor used on the CASB-CMF to complete line 6e on the DD Form 1861, to calculate line 6f (the Facilities Capital Employed).  If the proposal does not provide adequate documentation regarding the Treasury Rate used on the CASB-CMF, ask the Contractor or your cognizant ACO to verify.

      -- When requesting Facilities Capital Cost of Money, the contractor includes its Facilities Capital Cost of Money Factors by submitting a CASB-CMF (a form used exclusively for this purpose, as prescribed by DFARS 215.404-71-4(b), 48

    CFR 9904.414, and FAR 31.205-10)

      -- The form requires the contractor to calculate its FCCOM Factors by using the current Treasury Rate (stated in Block 1 of the CASB-CMF)

      -- In some cases, when time has passed between receiving the contractor's proposal and settling negotiations, the Treasury Rate is updated, and the updated Treasury Rate is different than the original Treasury Rate used on the CASB-CMF, Block 1.

      -- The above DFARS reference recognizes this situation, and instructs

    Government buyers to use the same Treasury Rate as proposed on the CASB-CMF.

      -- Although the updated Treasury Rate could significantly change the total

    Facilities Capital Cost of Money (block 6d of the DD Form 1861), it will not significantly change the Facilities Capital Employed (block 6f of the DD Form

    1861).

      -- Therefore, it is generally not be in the Government's best interest to require a contractor to submit a new proposal with the latest Treasury Rate in in the CASB-CMF, for the overall Facilities Capital Employed would change by only a negligible amount.

     

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