Subpart 942.7.Indirect Cost Rates
942.704 Billing rates.
942.705-1 Contracting officer determination procedure.
942.705-3 Educational institutions.
942.705-4 State and local governments.
942.705-5 Nonprofit organizations other than educational and state and local
governments.
Subpart 942.8.Disallowance of Costs
942.803 Disallowing costs after incurrence.
Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c).
Source: 49 FR 12026, Mar. 28, 1984, unless otherwise
noted.
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Subpart 942.7.Indirect Cost Rates
942.704 Billing rates.
(b) When the contracting officer or auditor responsible
for establishing billing rates, in accordance with FAR
42.704, has not established such rates or such rates are
not current for the performance periods (contractor FY)
under contract, the DOE contracting officer responsible
for administration of the contract shall establish an
appropriate rate(s) for billing purposes. If the
contractor holds more than one DOE contract covering
that period of performance, the DOE office with the
largest unliquidated obligations as of the beginning of
that performance period shall take the lead in
establishing the required billing rate for use on DOE
contracts. Once appropriate billing rates are
established by the responsible contracting officer
designated by FAR 42.704, such rates shall be adopted
by the contracting officer and all billings and payments
shall be retroactively revised to reflect the agreed upon
rate(s).
942.705-1 Contracting officer determination procedure. (DOE coverage.paragraphs (a) and (b)).
(a)(3) The Department of Energy shall use the
contracting officer determination procedure for all
business units for which it shall be required to
negotiate final indirect cost rates. A list of such business units is maintained by the Office of Policy,
within the Headquarters procurement organization.
(b) (1) Pursuant to FAR 52.216-7, Allowable Cost and
Payment, contractors shall be requested to submit their
final indirect cost rate proposals reflecting actual cost
experience during the covered period to the cognizant
contracting officer responsible for negotiating their
final rates.
The DOE negotiating official shall request all needed
audit service in accordance with internal procedures.
[61 FR 41702, Aug. 9, 1996]
942.705-3 Educational institutions. (DOE coverage.paragraph (a))
(a)(2) The negotiated rates established for the
institutions cited in OMB Circular No. A-88 are
distributed to the Cognizant DOE Office (CDO)
assigned lead office responsibility for all DOE indirect
cost matters relating to a particular contractor by the
Office of Policy, within the Headquarters procurement
organization.
[61 FR 41702, Aug. 9, 1996]
942.705-4 State and local governments.
A list of cognizant agencies for State/local government
organizations is periodically published in the Federal
Register by the Office of Management and Budget
(OMB). The responsible agencies are notified of such
assignments. The current negotiated rates for
State/local government activities is distributed to each
CDO by the Office of Policy, within the Headquarters
procurement organization.
[61 FR 41702, Aug. 9, 1996]
942.705-5 Nonprofit organizations other than educational and state and local governments.
OMB Circular A-122 establishes the rules for assigning cognizant agencies for the negotiation and approval of indirect cost rates. The Federal agency with the largest dollar value of awards (contracts plus federal financial assistance dollars) will be designated as the cognizant agency. There is no published list of assigned agencies. The Office of Policy, within the Headquarters procurement organization, distributes to
each CDO the rates established by the cognizant
agency.
[61 FR 41702, Aug. 9, 1996]
Subpart 942.8.Disallowance of Costs
942.803 Disallowing costs after incurrence.
(a) Contracting officer receipt of vouchers. Vouchers
and invoices submitted to DOE shall be submitted to
the contracting officer or designee for review and
approval for payment. If the examination of a voucher
or invoice raises a question regarding the allowability
of a cost submitted therein, the contracting officer,
shall:
(1) Hold informal discussion with the contractor as
appropriate.
(2) Issue a notice (letter, memo, etc.) to the contractor
advising of cost disallowed or to be disallowed and
advising the contractor that it may:
(i) Submit a written claim as to why the cost should be
reimbursed.if in disagreement with the disallowance.
(ii) File a claim under the disputes clause, which will
be processed in accordance with disputes procedures in
the event disagreements cannot be settled.
(3) Process the voucher or invoice for payment and
advise the finance office to deduct the disallowed cost
when scheduling the voucher for payment.
(c) Auditor reports and other sources of questioned costs. (1) From time to time reports are received from professional auditors that may question the allowability
of an incurred cost. Such reports are received as the
result of auditors, in their independent role under OMB
Circular A-73 or their own charters, scheduling and
conducting financial or compliance audits of
government contracts or as the result of an independent
request for auditor service, as discussed in 942.70
Audit Services.
(2) When auditor reports or other notifications question
cost or consider them unallowable, the contracting
officer shall follow-up such reports and resolve all such
cost issues promptly by determining, through
discussions with the contractor and/or auditor within
six months of the audit report date, or date of receipt if
a non-Federal audit. One of the following courses of
action shall be pursued:
(i) Accept and implement audit recommendations as
submitted.
(ii) Accept the principle of the audit recommendation
but reject the cost questioned amount.
(iii) Reject audit findings and recommendations.
(3) When implementing the accepted course of action,
the contracting officer shall.
(i) Hold discussions with the auditor and contractor as
appropriate.
(ii) Issue a notice in writing advising the contractor of
the government's intent to disallow the cost questioned,
if the contracting officer agrees with the auditor
concerning the questioned costs.
(iii) Negotiate a mutual settlement of questioned costs
if they are agreed with in principle but there is a
difference of opinion as to a proper amount.
(iv) Negotiate a mutual settlement of questioned costs
if the auditor recommendations are acceptable to the
contracting officer but the contractor does not accept
the finding or disallowance.
(v) Issue a final decision of the contracting officer
disallowing the questionable cost where differences
cannot be resolved, advising of the contractor's right to
appeal the decision, and advising the procedure to be
followed if it is decided to make such an appeal.
(vi) Initiate immediate recoupment actions for all
disallowed cost owed the government by:
(A) Requesting the contractor to provide a credit
adjustment (offset) against amounts billed the
government on the next or future invoice(s) if such
shall be submitted under a contract for which the
disallowed cost applies.
(B) Deducting (offset) the disallowed cost from the
next or future invoice(s) submitted under the contract;
if the contractor provides no adjustment under the
contract for which the disallowed cost applies;
provided such reduction is deemed appropriate.
(C) Advising the contractor that a refund shall be
directly payable to the government in situations where
there are insufficient payments owed by the
government to effect recovery via (A) or (B) above or
an offset is otherwise inappropriate.
(vii) Promptly notify the appropriate finance office of refunds directly payable to the government to ensure proper billing and follow-up action for collection.