Promoting Consistency in
CEI and Field Service
Contracts
What is the anticipated outcome?
• A subcommittee to review current State DOT
requirements, procedures, policies,
expectations?
• Add language to the audit guide?
• Strengthen Internal Control Questionnaire?
DOT Concerns
Firms propose a wide variety of items dirc.
What type of DC’s are reimbursable?
Reimbursing for vehicles?
When to use field rates?
Can per diem be paid?
Reimbursement of Premium OT?
Consultant Concerns
In general:
• The Consultant request is to be made whole on direct costs, if not they are less
profitable. Putting direct costs into overhead is not fair to other clients.
• Cost needs to be fair and reasonable in order to be charged.
• Management is responsible for how to account for costs…
Many implications:
• The Consultant needs to set up Policies and Procedures to be consistent across all
clients and all project types.
• A requirement of an adequate accounting system is proper segregation of direct
and indirect costs.
• Consultant must be compliant with:
– CAS 402 (Consistency in allocating costs incurred for the same purpose) and
– FAR 31.201, 31.202 and 31.203 (as it relates to Direct and Indirect Costs),
– If necessary, compliance with a CASB Disclosure Statement, Part II – Direct Costs.
•
Compliant with the “executed” contract
– State DOTs are inconsistent on what they allow to be reimbursed on projects
DOT – Consistency
Difficult for Contracting Officers and Auditors to
track allowable direct cost items per firm
Do most firms charge phones, computers,
paper, supplies, etc.?
Audit reports are not always detailed
enough to make a quick determination
Vehicle Reimbursement
Federal mileage rate?
Negotiated monthly amount including fuel?
Negotiated monthly amount, fuel paid based
upon mileage logs?
Actuals, as long as they are fair and reasonable?
When to use Field Rates
If job is solely in the field and lasts for more than
one year?
If firm is in client supplied office for 40 hrs/wk?
If employee is always labeled “field” in firm’s
records (included in Firm’s base as Field Labor).
Should DOT pay Per Diem?
Depends on RFP and LOI?
– Did firm indicate they had folks locally to do the
work?
– Urban or rural location?
Depends on how long job lasts?
Do any DOTs pay relocation expenses?
Premium Overtime
A firm always has a choice but must be
consistent!
If a firm has a policy to charge direct, and the
client refuses to pay, then should the DOT
increase the overhead?
If premium is identified separately in the OH,
then DOTs should be able to adjust OH
accordingly.
CAS 402
Firms must be consistent in their application of
direct and indirect costs.
If DOTs are not consistent, either a firm may lose
money or be in violation of CAS 402.
Inconsistent DOT Policies
Some States allow certain items to be billed
direct, their neighbors may not.
Contact Info
• toddjones@toddjonesconsulting.com
• 919-417-1764
• Tony Machi
• amachi@mbakerintl.com