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From a recent issue audit report from the GSA Office of the Inspector General the following statements were made:

"The OIG recognizes that it is the contracting officer’s responsibility to negotiate and award a reasonable profit rate in accordance with the guidance provided under Federal Acquisition Regulation (FAR) 15.404-4-Profit. For presentation purposes, the OIG used a 10 percent profit rate to calculate the per audit labor rate for ABC’s employees. We applied this factor because the vast majority of the sales analyzed  were under T&M task orders, a contract type that typically carries a lower risk to the contractor." 

"FAR 15.404-4 provides guidance on profit and states that T&M contracts should be treated in the same manner as cost-plus-fixed-fee contracts, which limits profit to 10 percent. In addition, our position is that subcontractor labor should be treated as a pass-through cost, and profit should not be applied to this labor type. This was then used to request a 32% reduction in rate for the labor category rates for the company. The OIG performed a cost build for the labor rates that were charged on task order contracts and independently reviewed base rates, indirect rates, & profit to determine what the actual target rate should have been."  

The purpose of this webinar is to look at Fair & Reasonable pricing based upon the above stated approach and cover the following questions:
  • Is FAR 15.404-4 an appropriate measure of the percentage of profit?
  • Do you add a fee to manage subcontractor labor or is it straight pass through? 
  • GSA Schedule pricing structures (CPL vs Market Rates) : what is the impact of true historical rates usage?
  • What are in your indirect rates? (Do you know)
  • What is defective pricing? 
  • What are the legal ramifications of defective pricing?
This webinar is presented by ...



The GCO Consulting Group advises government contractors and prepares them for success in both pre-award and post-award phases of Government Contracting. With our deep experience with contract regulations and compliance requirements, we support you throughout the entire process to maximize opportunities and mitigate risk in this highly regulated, complex environment.
About Our Experts
  • Scott Davidson
    CEO & Managing Principal, GCO Consulting Group
    Scott M. Davidson CPT. USA, Retired has more than 14 years of professional consulting and contracts management experience supporting Federal Government Contractors. Scott is the Managing Principal at The GCO Consulting Group (GCO) a growing Service Disabled Veteran Owned Business that is focused on GSA Schedule Consulting, Federal Business Development Strategy, and Federal Contract Compliance Support to small and large businesses.

    In his role at GCO, Scott provides specialized management consulting expertise in GSA Schedule Contracting Compliance, Federal Contract Management & Compliance services and Federal Proposal and Business Development support for all sizes of business from Small Businesses to Fortune 500 clients. Scott has prepared, negotiated and had awarded over 300 GSA Schedules since starting the firm in 2009. Scott’s focus areas also include GSA Schedule audit and litigation support and has provided audit and data analysis support for GSA Schedules for clients responding to over 30 GSA Office of the Inspector General investigations in which the disposition of findings was favorable for the clients.
    Scott served honorably in the United States Army as both enlisted soldier and a commissioned Officer and has served multiple combat tours throughout Southwest Asia to include Iraq and Afghanistan and is the recipient of the Bronze Star Medal. Scott was Medically Retired from the United States Army during his tour in Iraq in 2007.
  • Dismas Locaria Esq.
    Partner, Venable LLP
    Dismas (Diz) Locaria is a member of the firm's Government Contracts Group. Mr. Locaria's practice focuses on assisting government contractors in all aspects of working with the Federal government. Mr. Locaria has extensive experience assisting clients with regulatory and contract/grant term counseling, compliance (including ethics and integrity compliance), responsibility matters, such as suspension, debarment and other contracting/grant exclusions, small business matters and GSA Federal Supply Schedule contracting. Mr. Locaria also represents and counsel’s clients with the peculiarities of the Homeland Security Act, including obtaining and maintaining SAFETY Act protections. Government Contract and Grant Counseling and Compliance: Mr. Locaria has a wealth of knowledge regarding applicable contract (e.g., the Federal Acquisition Regulation) and grant (e.g., OMB Circular A-110 and A-122) regulations, including the application of these regulations to both prime contractors/grant recipients and subcontractors/subgrantees.
  • Michael Phipps
    Principal, GCO
    Michael Phipps has over 20 years of commercial and public sector experience with a strong background in government contracting and has directed operations for corporations with onsite management in the United States, Middle East & Asia.
    Mr. Phipps has proven experience managing business operations for international corporations, working in over 20 countries. During his career Mr. Phipps has worked on a variety of prime and subcontracts with experience in Project Management, Base Operations Support, Language Services, Logistics and Information Technology. Mr. Phipps has managed complex international programs and has led successful operations into some of the most volatile areas of the world.

    Mr. Phipps served nine years in the U.S. Army Reserves and Active Duty and is a former US Army Ranger.

    Mr. Phipps currently is the Chairman of the SBA’s Veteran Small Business Affairs Advisory Committee. Mr. Phipps also is a founding member of the American Legion’s Small Advisory Task Force, formed to educate The White House, Congress and The Legion Posts about Veteran’s business issues while developing methods and tools to assist veteran-owned small businesses.
    University of Maryland University College
    Master's Degree, Computer Systems Management

    West Virginia University
    Bachelor's Degree, Business
  • Gunjan Talati
    Partner, Kilpatrick Townsend & Stockton LLP
    Gunjan Talati is an experienced government contracts practitioner that regularly represents contractors in a variety of sectors including aerospace and defense, health care, and technology. Gunjan’s practice is a mix of regulatory compliance, transactional, and litigation.

    Gunjan was recognized in 2018 and the four years immediately preceding as a Washington D.C. “Rising Star” in the area of Government Contracts by Super Lawyers magazine. He was recommended in 2017 by Legal 500 US for Real Estate and Construction Law. Gunjan is fluent in Gujarati, an Indian dialect.
    Education
    Catholic University of America Columbus School of Law, J.D. (2006)
    Georgia Institute of Technology, B.S. (2003) with honors