Ko of the overarching contract may also be necessary

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KO of the overarching contract may also be necessary to avoid conflicts or inconsistencies between the labor standards and/or wage determinations contained in the basic contract and those that will be incorporated by any individual task order(s).
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Service Contract Act WHAT TO LOOK FOR in Service Contract Price Adjustment Requests It is that time of year again, when we have updated most of our SCA wage determinations within service contracts and that updating has triggered hundreds (if not thousands) of SCA price adjustment requests from our service contractors. When evaluating such requests, what should you look for? If not recognized, portions of contractors price adjustment requests that are not permitted under the clause can result in substantial overpayments for service contracts. Below is a “baker’s dozen” list of common errors contained in many SCA Price Adjustment requests: 1. Contractor requests for profit, general and administrative expense, and/or overhead costs are not allowed . The clause explicitly excludes adjustment of the contract price for these items in FAR 52.222-43(e) and FAR 52.222-44(d) . A review of the contractor’s detailed proposal should show whether they have improperly included such amounts. 2. Contractor requests for SCA price adjustments sometimes are based upon an inflated number of man-hours . Contractors will at times use the hours estimated in their solicitation as the basis of their SCA Price Adjustment requests. This can often lead to an adjustment total that is artificially high. Instead, the actual hours worked in the most recently completed period of performance is a more accurate measure of the “actual increase” in costs that the contractor will experience as a result of the new WD rates. A review of at least a sample of the contractor’s payroll records of ‘service employees’ performing on the contract should show any exaggeration of the man-hours for which the contractor is requesting adjustment. It is recommended that the work periods sampled be selected by the Navy/Marine Corps contracting personnel to avoid any skewing of the data sample by the contractor. 3. Payment for 100% of the differential between the "old" WD requirements and the "new" WD requirements may not be required or allowable under the clause. A third critically important element of any SCA price adjustment calculation is the actual rate paid by the contractor to the ‘service employees’ in the prior period of performance . The clause is very specific in this regard. For example, if the contractor paid $12 per hour in the previous period of performance and the new WD rate went from an old minimum rate of $11 per hour to a new minimum rate of $13 per hour; the contractor would be entitled to an adjustment of only $1 per man-hour plus accompanying costs allowed by the clause (FICA, Workers Comp). Despite this, contractors often request the entire $2 per man-hour difference between the old WD rate and the new WD rate plus the accompanying costs.
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