1. FINAL RATES TRAINING

2. b Requirements b Uses b Final rate calculation b Process and Time Line b Real-time review b Unallowables and penalties b Negotiation b Quick closeout and Indirect Cost Ceilings b Exercise and Summary b Discussion of your issues

3. Requirements b Contractors required to submit b Proposals due within 6 months of end of fiscal year b Certification of allowability of costs

4. USES FOR FINAL RATES b Adjust billing rates on cost-reimburseable contracts b Make contract closeout possible for cost- reimbursable contracts b Negotiate final prices on fixed-price incentive or fixed-price redeterminable contracts

5. FINAL RATE DETERMINATION b Determined by dividing negotiated indirect cost by negotiated base b Unallowable costs are removed from the pool b Unallowable costs are included in the G&A base

6. REVIEW AND NEGOTIATION PROCESS b ACO Negotiated Rates SubmissionSubmission Audit reviewAudit review Pricing reviewPricing review NegotiationNegotiation b Audit Determined Rates SubmissionSubmission Audit ReviewAudit Review Notification of Determined RatesNotification of Determined Rates If disagreement, Form 1 issuedIf disagreement, Form 1 issued If Contractor appeals, becomes ACO-negotiatedIf Contractor appeals, becomes ACO-negotiated

7. TIME-LINE b Major/Non-major contractors b 6 months for proposal b 12/24 months for audit b 6 months for negotiation b Background for time limits b Contract Audit Follow-Up (CAFU)

8. Methods to Enable Timeliness b Multi-year reviews b Real-time rates b Screening for unallowables b Roll forward

9. UNALLOWABLE COSTS b Expressly unallowable costs b Unallowable by agreement b FAR Part 31.205

10. PENALTIES b FAR 42.709 Expressly unallowableExpressly unallowable Unallowable through mutual agreementUnallowable through mutual agreement b ACO responsibility b Amounts

11. NEGOTIATION b ACO responsibility b May be delegated b Immaterial questioned costs Does it move the rate?Does it move the rate? Protect future positionProtect future position

12. QUICK CLOSEOUT RATES b FAR 42.708 b Requirements for use b Definition of relatively insignificant b Waivers b Use

13. INDIRECT COST CEILINGS b Cost-sharing arrangement b New or recently reorganized companies b Unreasonably low rates b Must not move costs to other contracts

14. EXERCISE b Read over carefully b Work in teams b Determine rates b Explain position to class

15. SUMMARY b Requirements and uses b Determination of rate b Process b Unallowables and penalties b Negotiation b Quick Closeout and Indirect Cost Ceilings