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  • Question

    Can the contractor direct charge labor for personnel who are 'on standby', even if the personnel cannot reasonably get on base to perform? I reviewed FAR 31 and did not see anything applicable.


    Answer

    Unfortunately, the answer (of course) is… “It Depends”.
     
    You were definitely in the right place to start your research-FAR Part 31.  Suggest you review completely FAR 31.201; and pay extra close attention to 31.201-2, 31.201-3 and 31.201-4.  Remember, on Cost Reimbursable contracts the Government bears much of the cost risk associated with performance.  Based on your question background, FAR 52.216-7 is probably not going to help you much in answering your question.
     
    This is similar to a request for equitable adjustment scenario.  There appears to have been an unforeseen delay; excusable delay at that (severe weather, acts of god, etc., see FAR 52.249-14 which should be in your contract) that happened during normal/routine performance.
     
    What you will have to do is determine if their costs are Allowable (and not expressly unallowable), Reasonable, and Allocable.  This could be complicated based on the contractor’s cost accounting methodology and the facts of the situation during the weather emergency.  The real question is most likely whether or not it was reasonable for the contractor to have their personnel in a “standby” status during the delay or was there another course of action they could/should have taken to minimize/avoid incurred cost (i.e. emergency leave/vacation, work on another project, charge to an overhead account, etc.).

     
    Another resource for you is the Contract Pricing Reference Guides, Volume 4, Chapter 6, which discusses equitable adjustment pricing.  Other sections of the CPRG may be applicable based on the specific facts of your situation.
     
    Finally, before making any decision, we recommend seeking the advice and counsel of your contract legal and auditing personnel.

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