|
Termination for Convenience Proposals
WHAT YOU NEED TO KNOW
AND SOME BASIC STEPS TO FORMULATE A PLAN FOR RECOVERY
There are many things that a contractor must know in the case of a termination, not only
to protect your best interest, but to maximize the recovery of your costs and profit.
Under the termination for convenience of the Government, you have established rights.
However, you must precisely and correctly fortify your position to recover money you are
legitimately entitled to recover. CECA has the experience and knowledge to take your firm
through the maze of paper and regulations to achieve this goal.
The Federal Acquisition Regulations Contract Cost Principles and Procedures includes a
section regarding costs for contracts terminated for convenience of the Government (FAR
Part 31). It addresses the allowability of costs in the case of a termination for
convenience.
THE SETTLEMENT PROCESS
The settlement process can be a long, laborious task. This is
particularly true for larger, complex terminations. Termination for convenience
settlements involve more than just filing a form and waiting for the Government to make
payment. The Government can, and often does, challenge costs which seem obviously
allowable to the contractor. Hard work and a working knowledge of the FAR Termination and
Cost Principles must be used to defend and prove your costs.
Another segment of the termination process which cannot be avoided if
your termination settlement proposal costs exceed the threshold, is the Defense Contract
Audit Agency (DCAA) audit. The assistance of a termination professional is particularly
important at this phase of the settlement process. The Government and the Contractor often
tend to "speak two different languages". A termination professional can help
bridge the gap. Costs challenged in a DCAA audit are often difficult to overcome. Using an
experienced termination professional during the DCAA audit process can help the contractor
come out of the audit with less costs questioned.
It is not always in the best interest of the contractor to quickly
"throw" a proposal together in the interest of making a quick settlement. This
usually results in risking the recovery all of its claimable costs, while still not making
a quick settlement. The settlement process is generally not a quick process. After the
DCAA audit is performed, the Termination Contracting Officer reviews the report and
prepares a negotiation objective. It can be several months after the DCAA audit before
negotiations begin. The TCO usually has several proposals to review and settle at any
given time. Constant communication with the Government is often required to keep the your
settlement process moving in an expeditious manner.
Maximizing your recovery requires correctly identifying, proving all claimable costs and
actively participating in the termination procedures.
CECA has successfully settled T for C claims for contractors with the Department of
Energy, the Air Force, the Army Corps of Engineers and the Department of Defense. CECA
specializes in the preparation and negotiation of termination for convenience proposals.
We have successfully negotiated and settled in excess of seventy five (75) Government
contract terminations in the past several years.
 Most
contractors have an incomplete understanding on how to present the termination settlement
proposal to the government and what costs to include in the proposal. Unless these
obstacles can be overcome, the contractor may not fully recover its costs incurred.
CECA's experience has resulted in a very successful rate of settlement recovery for its
clients. As your consultant, CECA will:
1) Review the information and circumstances surrounding your T for C and provide
information and advice to most effectively protect your financial interest and recovery.
2) Prepare the T for C claim in total with all required Government forms and in accordance
with Federal Acquisition Regulations (FAR) on your behalf based on the information
provided by you.
3) Perform a claims analysis which could result in additional recovery to your firm due to
CECA's consulting experience.
4) Represent your firm during the DCAA audit, which will be required as a result of the
termination, prior to entering into final negotiations. (CECA has experience and the
knowledge of the issues that DCAA targets in termination audits and knows how to respond
to protect your company's best interest.)
5) Prepare (or review) subcontractor and vendor proposals and prepare justifications on
your behalf in order to obtain approval from the TCO for the subcontractors proposals.
6) CECA will assist you in the negotiation of your proposal, if requested, to ensure the
most favorable financial recovery to your firm.
The costs associated with the preparation of the settlement proposal are recoverable
expenses, to include accounting, legal, clerical and other expenses reasonably necessary
for the preparation of the Termination Settlement Proposal and supporting data.
|
