1. What rule says the contractor can or can't do this.
2. Is there a time limit in which the contractor can come back looking for money. For some reason I remember five years.
Question: 1. What rule says the contractor can or can't do this?
The contractor is complying with Federal Acquisition Regulations (FAR). FAR 42.705, Final indirect cost rates states:
“(a) Final indirect cost rates shall be established on the basis of-
(1) Contracting officer determination procedure (see 42.705-1), or
(2) Auditor determination procedure (see 42.705-2)”
Forward pricing rates are estimates that may be used for contract award and billing during contract performance. Since performance is complete, the contractor officer must wait for DCAA/DCMA final rates to determine the amounts due to the contractor under the contract. FAR 42.705 allows for this practice and mandates the government to establish final indirect cost rates.
Question 2. Is there a time limit in which the contractor can come back looking for money? For some reason I remember five years.
The time limit is up to the establishment of final rates. After the final rates are settled the contractor must submit a completion invoice or voucher reflecting the settled amounts and rates within 120 days, unless a longer period is appropriate (FAR 42.705 (b)). If the contractor does not submit a completion invoice or voucher within the specified time, the contracting officer may determine the amounts due to the contractor under the contract and must issue a final decision as a unilateral modification to the contract (FAR 42.205 (b). The contractor may appeal to the agency board of contract appeals within 90 days from the date of receiving the decision, or directly to the United States Court of Federal Claims (except as provided in 41 U.S.C.7102(d), regarding Maritime Contracts) within 12 months of the date the decision is received (FAR 33.211).