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  • Question

    Is this a true statement?, I cannot find any regulation to see if that is stated in regulation/policy.


    Answer

    The answer depends on what type of “rate” is being discussed.
    FAR 42.302 (a) lists the 71 functions that may normally be delegated by the Contracting Officer to the Contract Administration Office (CAO).  For the DoD, that would refer to the Defense Contract Management Agency.  The Contracting Officer may retain any of the 71 functions listed, except for those functions described in paragraphs 42.302 (a) (5), (9), (11) and (12). 
    For this discussion FAR 42.302 (a) (5) and (9) are germane since they both involve the establishment of some type of “rate”. 
    First, FAR 42.302 (a) (5) specifies that the Contracting Officer may not retain the function to negotiate Forward Pricing Rate Agreements (FPRA).  If the rate in question is being used to establish part of the Government’s negotiation position, then the appropriate rate to use would be the rate established by the cognizant ACO for forward pricing, or the FPRA.  In the absence of an FPRA, then the Government position should be based on a Forward Pricing Rate Recommendation (FPRR), again as provided by the cognizant ACO.  If an FPRR does not exist, then it would be incumbent on the Government contract negotiator to establish an appropriate rate in order to achieve a fair and reasonable price for the government.  And this person may not be an ACO.
    Next, FAR 42.302 (a) (9) assigns the responsibility for establishing final indirect cost rates and billing rates to the CAO.  In addition, DFARS 242.705-1(a) establishes that the corporate Administrative Contracting Officer (CACO) and individual Administrative Contracting Officers (ACO) will jointly decide how to conduct the final indirect cost rate negotiations with the contractor.


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