Sign In
  • Question

    Can we tack a surcharge onto a nearly completed work order (unobligated) (PMC, 1A3A, active/reserve, base/OCO)?? What regulation in the FMR gives us the green light on this?


    Answer

    By statutory authority, working capital fund (WCF) activities have a buyer-seller relationship and operate under a breakeven concept. Activities recoup the costs of conducting business by charging customers a rate that covers all costs. Profits are returned to customers by rate decreases and customers absorb losses in rate increases. WCF rates are usually set annually to recover all costs of operations. Title 10 US Code 2208 provides statuatory authority and DOD FMR Vol. 2B, Chapter 9, provides a full explanation of rate setting policies.

     A surcharge can be included in the price to cover material, personnel, transportation, repair, storage, administrative, and other associated costs.  It is fine to request additional funding from the customer if the initial amount you received didn't cover the total cost of the effort,   However it cannot be used for the sole purpose of getting end-of-year funding (sweep up) that will go unobligated from your customer if it's not tied to a planned effort.  Recommend that you discuss with your local Comptroller or Legal.

     

    .

    Open full Question Details