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    When the contractor submits their final invoice on the travel CLIN, do they use the negotiated final rates for 2015 and 2016 in determining their G&A charges on the CLIN. Or do they use final rates for 2019 for the bill they received in 2019 since this is the year they are incurring this cost even though the work was completed in 2015 and 2016. My understanding on final rates is they are applied to the year the work is performed, not the year the bill received. The work was performed in 2015 & 2016 w/in the Period of Performance Thank you.


    FAR 31.201-2 states that an allowable cost must conform to generally accepted accounting principles (GAAP). The Matching principle requires that an expense incurred during a period must be recorded in the same period in which the related revenues are earned. Simply because the subcontractor didn't invoice until years after the period of performance does not prevent the accrual of an expense (travel in this case). It's the prime contractor's responsibility to require timely submission of the subcontractor's invoices. This should be accomplished by way of its own contract (and enforcing that contract) with its subcontractor. Failing to do so places responsibility for any negative billing outcomes on the prime itself. Since indirect rates can increase over time, it would be inappropriate for a prime contractor to pass to the Government a potentially higher bill because the prime matched the late subcontractor invoice with a higher indirect cost rate. The expense must have been measurable back in 2016. The fact that the final rates for 2015-2018 were not completed until 2019 does not override the significance of the Matching principle. The clause at FAR 52.216-7 gives the contracting officer latitude for determining the proper (allowable) costs to pay. The ACO can determine the appropriate payment amount and assert that the indirect rate corresponding to the period of performance (i.e., not when the prime ultimately received the subcontractor's invoice) applies. Please consult with DCAA or DCMA for a more authoritative response.


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