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(Revised October 20, 2008)

 

 



 252.215-7000 Pricing Adjustments.
 252.215-7001 Reserved.
 252.215-7002 Cost Estimating System Requirements.
 252.215-7003 Excessive Pass-Through Charges – Identification of Subcontract Effort.
 252.215-7004 Excessive Pass-Through Charges.
 252.215-7005 Evaluation Factor for Employing or Subcontracting with Members of the Selected Reserve.
 252.215-7006 Use of Employees or Individual Subcontractors Who are Members of the Selected Reserve.


252.215-7000  Pricing Adjustments.

As prescribed in 215.408(1), use the following clause:

 

PRICING ADJUSTMENTS (DEC 1991)

 

The term “pricing adjustment,” as used in paragraph (a) of the clauses entitled “Price Reduction for Defective Cost or Pricing Data--Modifications,” “Subcontractor Cost or Pricing Data,” and “Subcontractor Cost or Pricing Data--Modifications,” means the aggregate increases and/or decreases in cost plus applicable profits.

 

(End of clause)

 

252.215-7001  Reserved.

 

252.215-7002  Cost Estimating System Requirements.

As prescribed in 215.408(2), use the following clause:

 

COST ESTIMATING SYSTEM REQUIREMENTS (DEC 2006)

 

      (a)  Definitions. 

 

      “Acceptable estimating system” means an estimating system that—

 

              (1)  Is maintained, reliable, and consistently applied;

 

              (2)  Produces verifiable, supportable, and documented cost estimates that are an acceptable basis for negotiation of fair and reasonable prices;

 

              (3)  Is consistent with and integrated with the Contractor’s related management systems; and

 

              (4)  Is subject to applicable financial control systems.          

 

      “Estimating system” means the Contractor's policies, procedures, and practices for generating estimates of costs and other data included in proposals submitted to customers in the expectation of receiving contract awards.  Estimating system includes the Contractor's—

 

              (1)  Organizational structure;

 

              (2)  Established lines of authority, duties, and responsibilities;

 

              (3)  Internal controls and managerial reviews;

 

              (4)  Flow of work, coordination, and communication; and

 

              (5)  Estimating methods, techniques, accumulation of historical costs, and other analyses used to generate cost estimates.

 

      (b)  General.  The Contractor shall establish, maintain, and comply with an acceptable estimating system.

 

      (c)  Applicability.  Paragraphs (d) and (e) of this clause apply if the Contractor is a large business and either—

 

              (1)  In its fiscal year preceding award of this contract, received Department of Defense (DoD) prime contracts or subcontracts, totaling $50 million or more for which cost or pricing data were required; or

 

              (2)  In its fiscal year preceding award of this contract—

 

                    (i)  Received DoD prime contracts or subcontracts totaling $10 million or more (but less than $50 million) for which cost or pricing data were required; and

 

                    (ii)  Was notified in writing by the Contracting Officer that paragraphs (d) and (e) of this clause apply.

 

      (d)  System requirements.

 

              (1)  The Contractor shall disclose its estimating system to the Administrative Contracting Officer (ACO) in writing.  If the Contractor wishes the Government to protect the information as privileged or confidential, the Contractor must mark the documents with the appropriate legends before submission.

 

              (2)  An estimating system disclosure is acceptable when the Contractor has provided the ACO with documentation that—

 

                    (i)  Accurately describes those policies, procedures, and practices that the Contractor currently uses in preparing cost proposals; and

 

                    (ii)  Provides sufficient detail for the Government to reasonably make an informed judgment regarding the acceptability of the Contractor's estimating practices.

 

              (3)  The Contractor shall—

 

                    (i)  Comply with its disclosed estimating system; and

 

                    (ii)  Disclose significant changes to the cost estimating system to the ACO on a timely basis.

 

      (e)  Estimating system deficiencies.

 

              (1)  The Contractor shall respond to a written report from the Government that identifies deficiencies in the Contractor's estimating system as follows:

 

                    (i)  If the Contractor agrees with the report findings and recommendations, the Contractor shall—

 

                            (A)  Within 30 days, state its agreement in writing; and

 

                            (B)  Within 60 days, correct the deficiencies or submit a corrective action plan showing proposed milestones and actions leading to elimination of the deficiencies.

 

                    (ii)  If the Contractor disagrees with the report, the Contractor shall, within 30 days, state its rationale for disagreeing.

 

              (2)  The ACO will evaluate the Contractor's response and notify the Contractor of the determination concerning remaining deficiencies and/or the adequacy of any proposed or completed corrective action.

 

(End of clause)

 

252.215-7003  Excessive Pass-Through Charges – Identification of Subcontract Effort.

As prescribed in 215.408(3), use the following provision:

 

EXCESSIVE PASS-THROUGH CHARGES –

IDENTIFICATION OF SUBCONTRACT EFFORT (MAY 2008)

 

      (a)  Definitions.  “Added value,” “excessive pass-through charge,” “subcontract,” and “subcontractor,” as used in this provision, are defined in the clause of this solicitation entitled “Excessive Pass-Through Charges” (DFARS 252.215-7004).

 

      (b)  General.  The offeror’s proposal shall exclude excessive pass-through charges.

 

      (c)  Performance of work by the Contractor or a subcontractor.

 

              (1)  The offeror shall identify in its proposal the total cost of the work to be performed by the offeror, and the total cost of the work to be performed by each subcontractor, under the contract, task order, or delivery order.

 

              (2)  If the offeror intends to subcontract more than 70 percent of the total cost of work to be performed under the contract, task order, or delivery order, the offeror shall identify in its proposal—

 

                    (i)  The amount of the offeror’s indirect costs and profit applicable to the work to be performed by the subcontractor(s); and

 

                    (ii)  A description of the added value provided by the offeror as related to the work to be performed by the subcontractor(s).

 

              (3)  If any subcontractor proposed under the contract, task order, or delivery order intends to subcontract to a lower-tier subcontractor more than 70 percent of the total cost of work to be performed under its subcontract, the offeror shall identify in its proposal—

 

                    (i)  The amount of the subcontractor’s indirect costs and profit applicable to the work to be performed by the lower-tier subcontractor(s); and

 

                    (ii)  A description of the added value provided by the subcontractor as related to the work to be performed by the lower-tier subcontractor(s).

 

(End of provision)

 

252.215-7004  Excessive Pass-Through Charges.

As prescribed in 215.408(4), use the following clause:

 

EXCESSIVE PASS-THROUGH CHARGES (MAY 2008)

 

      (a)  Definitions.  As used in this clause—

 

              “Added value” means that the Contractor performs subcontract management functions that the Contracting Officer determines are a benefit to the Government (e.g., processing orders of parts or services, maintaining inventory, reducing delivery lead times, managing multiple sources for contract requirements, coordinating deliveries, performing quality assurance functions). 

 

              “Excessive pass-through charge,” with respect to a Contractor or subcontractor that adds no or negligible value to a contract or subcontract, means a charge to the Government by the Contractor or subcontractor that is for indirect costs or profit on work performed by a subcontractor (other than charges for the costs of managing subcontracts and applicable indirect costs and profit based on such costs).

 

              “No or negligible value” means the Contractor or subcontractor cannot demonstrate to the Contracting Officer that its effort added value to the contract or subcontract in accomplishing the work performed under the contract (including task or delivery orders).

 

              “Subcontract” means any contract, as defined in section 2.101 of the Federal Acquisition Regulation, entered into by a subcontractor to furnish supplies or services for performance of the contract or a subcontract.  It includes but is not limited to purchase orders, and changes and modifications to purchase orders.

 

              “Subcontractor” means any supplier, distributor, vendor, or firm that furnishes supplies or services to or for the Contractor or another subcontractor.

 

      (b)  General.  The Government will not pay excessive pass-through charges.  The Contracting Officer shall determine if excessive pass-through charges exist.

 

      (c)  Required reporting of performance of work by the Contractor or a subcontractor.  The Contractor shall notify the Contracting Officer in writing if—

 

              (1)  The Contractor changes the amount of subcontract effort after award such that it exceeds 70 percent of the total cost of work to be performed under the contract, task order, or delivery order.  The notification shall identify the revised cost of the subcontract effort and shall include verification that the Contractor will provide added value; or

 

              (2)  Any subcontractor changes the amount of lower-tier subcontractor effort after award such that it exceeds 70 percent of the total cost of the work to be performed under its subcontract.  The notification shall identify the revised cost of the subcontract effort and shall include verification that the subcontractor will provide added value as related to the work to be performed by the lower-tier subcontractor(s).

 

      (d)  Recovery of excessive pass-through charges.  If the Contracting Officer determines that excessive pass-through charges exist—

 

              (1)  For fixed-price contracts, the Government shall be entitled to a price reduction for the amount of excessive pass-through charges included in the contract price; and

 

              (2)  For other than fixed-price contracts, the excessive pass-through charges are unallowable in accordance with the provisions in Subpart 31.2 of the Federal Acquisition Regulation (FAR) and Subpart 231.2 of the Defense FAR Supplement.

 

      (e)  Access to records.     

 

              (1)  The Contracting Officer, or authorized representative, shall have the right to examine and audit all the Contractor’s records (as defined at FAR 52.215-2(a)) necessary to determine whether the Contractor proposed, billed, or claimed excessive pass-through charges.

 

              (2)  For those subcontracts to which paragraph (f) of this clause applies, the Contracting Officer, or authorized representative, shall have the right to examine and audit all the subcontractor’s records (as defined at FAR 52.215-2(a)) necessary to determine whether the subcontractor proposed, billed, or claimed excessive pass-through charges.

 

      (f)  Flowdown.  The Contractor shall insert the substance of this clause, including this paragraph (f), in all subcontracts under this contract, except for—

 

              (1)  Firm-fixed-price subcontracts awarded on the basis of adequate price competition;

 

              (2)  Fixed-price subcontracts with economic price adjustment, awarded on the basis of adequate price competition;

 

              (3)  Firm-fixed-price subcontracts for the acquisition of a commercial item; or

 

              (4)  Fixed-price subcontracts with economic price adjustment, for the acquisition of a commercial item.

 

(End of clause)

 

ALTERNATE I (MAY 2008).  As prescribed in 215.408(4)(ii), substitute the following paragraph (b) for paragraph (b) of the basic clause:

 

      (b)  General.  The Government will not pay excessive pass-through charges.  The Contracting Officer has determined that there will be no excessive pass-through charges, provided the Contractor performs the disclosed value-added functions.

 

252.215-7005  Evaluation Factor for Employing or Subcontracting with Members of the Selected Reserve.

As prescribed in 215.370-3(a), use the following provision:

 

EVALUATION FACTOR FOR EMPLOYING OR SUBCONTRACTING WITH MEMBERS OF THE SELECTED RESERVE (OCT 2008)

 

      (a)  Definition.  “Selected Reserve,” as used in this provision, has the meaning given that term in 10 U.S.C. 10143.  Selected Reserve members normally attend regular drills throughout the year and are the group of Reserves most readily available to the President.

 

      (b)  This solicitation includes an evaluation factor that considers the offeror’s intended use of employees, or individual subcontractors, who are members of the Selected Reserve.  

 

      (c)  If the offeror, in the performance of any contract resulting from this solicitation, intends to use employees or individual subcontractors who are members of the Selected Reserve, the offeror’s proposal shall include documentation to support this intent.  Such documentation may include, but is not limited to—

 

              (1)  Existing company documentation, such as payroll or personnel records, indicating the names of the Selected Reserve members who are currently employed by the company; or

 

              (2)  A statement that one or more positions will be set aside to be filled by new hires of Selected Reserve members, along with verifying documentation.

 

(End of provision)

 

252.215-7006  Use of Employees or Individual Subcontractors Who are Members of the Selected Reserve.

As prescribed in 215.370-3(b), use the following clause:

 

USE OF EMPLOYEES OR INDIVIDUAL SUBCONTRACTORS WHO ARE MEMBERS OF THE SELECTED RESERVE (OCT 2008)

 

      (a)  Definition.  “Selected Reserve,” as used in this clause, has the meaning given that term in 10 U.S.C. 10143.  Selected Reserve members normally attend regular drills throughout the year and are the group of Reserves most readily available to the President.

 

      (b)  If the Contractor stated in its offer that it intends to use members of the Selected Reserve in the performance of this contract—

 

              (1)  The Contractor shall use employees, or individual subcontractors, who are members of the Selected Reserve in the performance of the contract to the fullest extent consistent with efficient contract performance; and

 

              (2)  The Government has the right to terminate the contract for default if the Contractor willfully or intentionally fails to use members of the Selected Reserve, as employees or individual subcontractors, in the performance of the contract.

 

(End of clause)


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