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    Who is responsible for covering costs for idle time? Is the inclusion of non-touch labor and idle time on a services contract the most efficient use of dollars when it has already been budgeted for on individual programs (2)? Is this appropriate?


    Answer

    The program support functions should reside and be priced at the lowest level or at the contract where they are being utilized. In this case, this appears to be the individual delivery order (DO) level. Assuming that you have priced the individual DO into the future, you would have to re-price the DO to remove the support costs so that they could be priced into the enterprise contract. (As the functional wants) It could be done, but it could be difficult. Whether or not this is done, the costs in question can only be charged once, and preferably at the contract (contract level) where they are most appropriate and best allocated. (There are accounting standard rules that dictate/cover this, but they might not be exactly applicable here, just the concept)

    The question “who is responsible for covering costs for ide time” presents a unique problem. Most contractors account for idle time (training, sick time, conferences, etc. that are not actually spent directly working on a project) in overhead rates, most likely in the specific overhead pools. (ENG, MFG, etc.) It might be worth looking into whether or not the contractor(s) awarded (or to be awarded) have excluded idle time from their pools. If not, and they are paid on another contract directly (which it appears they are, based on your comments), you could be in a double-charging situation (CAS 402, if CAS covered). There are situations where contractors can do both, but it needs to be specified under what circumstances this will occur (disclosed in disclosure statement).

    So in summary, for number one:  the individual DO makes more sense both from an administrative and accounting perspective. (But one way or the other not both, with the contracts in place requiring adjustments) Number two:  need to ensure idle time is not being charged in overhead and, also, directly to contracts. If the contractor is charging like costs to the OH pool and then to the DO, you have a potential CAS violation (CAS 402), or, absent CAS, a FAR reasonableness/allowable issue. (FAR Part 31)

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