Schedule I Part Four: Columns in Battle

The next columns I want to look at are:

“Prior Years Settled Total Costs”

“Unsettled/Claimed Direct And Indirect Costs Using Claimed: Prior Year Costs FYE”

 

 “Prior Years Settled Total Costs”

This column is used to record the previous costs on a contract settled with the government. If you have a $1,000,000 in proposed costs on several years of incurred cost submissions and DCAA has audited and agreed to only one year, say $200,000, you would put $200,00 in this column for the contract’s prior year’s settled total costs.

“Unsettled/Claimed Direct And Indirect Costs Using Claimed: Prior Year Costs FYE”

This is simply a beautiful, clear, use of the English Language. Just what does “FYE” mean in this context? Yes, I understand it literally means “Fiscal Year Ending” but if this column is meant to record all of the costs before the current fiscal year should you proceed the FYE with a date such as 12/31/2015? I believe settled costs are claimed also. Are they included in this column?

DCAA interprets this column as where you record the contract’s claimed but unsettled costs totaled of the previous years, thus “Prior Year Costs” means “Prior Years’ Non Negotiated Costs”.

 

Less Contract Limitations Rebates/Credits

The little column that could do it all, except adhere to the underlying regulation.  DCAA note on the following states:

“5. Contract limitations include costs incurred that are included in the column entitled ” Total Cumulative Settled or Claimed” and are either (i) in excess of contract ceiling rates, (ii) unallowable per contract terms, (iii) outside the period of performance, or (iv) in excess of contract ceiling amounts, etc.”

Let us start with the low hanging fruit: “unallowable per contract terms”.  Gee, didn’t DCAA’s Model Schedule I already address this in the earlier columns on year’s costs, the “claimed” costs?  This kind of implementation issue supports my earlier thought about “form by committee”.

In addition to doing work that the previous columns addressed, this hard working column attempts to capture all of the areas in DCAA’s imagination that could trigger costs in excess of contracted amounts.

One wonders why they just do not say this: “Costs in Excess of Contracted Amount”? Does it matter if the excess costs arise out of contract ceiling rates, unallowable costs, outside of the period of performance (which would normally be unallowable by the way), the contract ceiling amounts, or the DCAA noted “etc.”.

Incurred cost proposals are certified by the contractor. I cannot imagine that anyone worries about populating this column in the manner DCAA wishes would be a waiving of any rights to recover those costs. I mean DCAA, did use the term “etc”. I imagine it is just another example, rife on this form, of bureaucratic language.

Wait, wait, wait… this is addressed in the note for the next column: “6. The cumulative amounts in this column should not exceed the contract ceiling.  If amounts exceeding the ceiling are in dispute, or if you have requested that the contracting agency increase the contract ceiling, please include the amounts in the ” Contract Limitations” column and provide an explanation in a footnote.” (emphasis added).

Gee, whatever was I thinking, of course it only appears to protect your rights on recovery of any costs in excess of contracted amounts you need to actively assert a defense on the Model Schedule I on a form that exceeds the regulatory requirements without approval of OMB or any other government official outside of DCAA.

The rest of the columns deal with billing. It is a bit amusing that DCAA reminds everyone that these are ‘manual’ entries. I guess they forgot that most of the other columns are also manual entry. More ‘committee’ design issues.

The problem on the billing sections are the design problems associated with DCAA failing to define “costs’ in terms of basic accounting principles.

Let’s move to the bottom of the form reference the T&M part. IF you look at the DCAA Demo worksheet none of the prior year data is populated for T&M contracts. Is this simply laziness on DCAA’s part or an attempt to limit the perception of the flawed and fractured nature of the model schedule?

 

Next: What is a contractor and DCAA to do?