Bidders Library JITC Instructions - JITCI 650-70-01.pdf

DEFENSE INFORMATION SYSTEMS AGENCY

P. O. BOX 549

FORT MEADE, MARYLAND 20755-0549

JITC INSTRUCTION 650-70-01* 23 January 2019

RESOURCE MANAGEMENT

Reimbursable Charging and Cost Estimating Policy

1. Purpose. This instruction prescribes policy, assigns responsibility, and outlines duties for properly estimating and charging costs to the Joint Interoperability Test Command’s (JITC’s) reimbursable customers and projects in JITC’s role as a member of the Department of Defense’s (DoD) Major Range and Test Facility Base (MRTFB).

2. Applicability. Applies to all military and civilians assigned to, employed by, or engaged in reimbursable work on behalf of JITC.

3. Authority. Policies and rates are in accordance with DoD Directive (DoDD) 3200.11, “Major Range and Test Facility Base,” Change 1, August 29, 2017, applicable chapters of the DoD Financial Management Regulation 7000.14-R, and Office of Personnel Management (OPM) Salary Tables.

4. References.

4.1 Joint Travel Regulations (updated monthly).

4.2 DoD Financial Management Regulation (FMR) 7000.14-R Volume 11A, Chapter 12, July 2016.

4.3 DoD Instruction 4000.19, "Support Agreements,"

25 April 2013

5. Definitions.

5.1 Direct costs. Direct costs are those costs that are

directly attributable to the use of the facility or resource for testing under a particular project or program. DoD Component users must reimburse MRTFB activities for direct costs readily identifiable. Chargeable direct costs include labor, contract labor (which includes a portion of general and administrative

(G&A) expense and overhead), material, minor construction, utilities, equipment, supplies, items damaged or consumed during testing, and any resource or item maintained for a particular program. Direct costs must be billed in accordance with DoD FMR Chapter 1 and must be identified to a job or function served in support of a customer order.

5.2 Indirect costs. Indirect costs are overhead costs of the

MRTFB activities and are not to be charged to DoD Component users. Indirect costs are defined as the costs of maintaining, operating, upgrading, and modernizing the facility or resource.

Indirect costs do not include any incremental costs of operating the facility or resource that are directly attributable to the use of the facility or resource for specific testing under a particular project or program.

5.3 Major Range and Test Facility Base (MRTFB). The designated core set of DoD Test and Evaluation (T&E) infrastructure and associated workforce that must be preserved as a national asset to provide T&E capabilities to support the DoD acquisition system.

5.4 MRTFB Activity. Organizational command element of a DoD

Component responsible for managing MRTFB capabilities and resources.

5.5 Non-DoD Component Users. Federal, state, or local

government agencies; allied foreign governments; defense contractors; commercial entities, and private organizations.

6. Charge Policy. DoD Financial Management Regulation 7000.14-R Volume 11A, Chapter 12 provides reimbursable policy for MRTFB Activities.

6.1 Funding of MRTFB Activities is designed to: (1) assure the most cost effective development and testing of materiel, and (2) provide for inter-service compatibility, efficiency, and equity without influencing technical testing decisions or inhibiting legitimate and valid testing.

6.2 The MRTFB must be managed and operated under uniform

financial guidelines across the DoD Components. Accordingly, all direct and indirect costs charged to MRTFB users must be uniform and applied consistently among all the MRTFB activities.

6.3 All costs incurred by MRTFB activities must be billed to

one of the following sources: (1) MRTFB users (customers), (2) direct appropriations of the managing activity, or (3) other sources as directed by DoD.

6.4 A MRTFB may be used by DoD Component users (including DoD training users) and Non-DoD Component users. The type of user or customer determines the total amount charged to the user and whether they are charged only direct costs or direct costs plus an appropriate level of indirect costs.

6.5 In accordance with DoDI 4000.19, MRTFB activities and DoD or Non-DoD Federal Component users must use support agreements to document and establish the General Terms and Conditions between buyers and sellers for all inter- and intra-governmental reimbursable transactions. Refer to JITCI 640-50-06, “Support Agreements” and JITCI 640-50-07 “JITC Cooperative Research and Development Agreements” for detailed information on JITC’s agreement processes.

6.6 Reimbursement of direct costs incurred for aborted or

canceled tests or for damages to property or equipment caused by a user in the preparation for, or conduct of, any activity on the facility or range must be pursued to the extent permitted by law and DoD policy.

6.7 DoD Component Users.

6.7.1 Direct Costs. DoD Component users are to be charged and must reimburse MRTFB activities for direct costs identifiable with a particular program or customer order. Direct costs billed must be in accordance with the FMR, Chapters 1 and 4 and must be attributed to a job or function served in support of a customer order.

6.7.1.1 By mutual agreement, investments in new or existing test and evaluation facilities may be funded, in whole or in part, by one or more DoD users of a MRTFB activity. This agreement, however, must explicitly delineate responsibilities for ownership/capitalization of the asset, funding, staffing, operating, and maintaining the facility, and must be approved by all parties prior to obligation of any funds for the project.

6.7.1.2 Direct incremental costs (i.e., costs resulting from an increase in production) must be charged to DoD Component users.

6.7.2 Indirect costs. DoD Component users are not to be

charged and must not reimburse MRTFB activities for indirect costs.

6.7.2.1 Overhead (indirect) costs must remain as costs fully

borne by the MRTFB activity and paid for by the institutionally funded program element accounts comprising the MRTFB’s budgetary structure.

6.7.2.2 Indirect incremental costs must not be charged to DoD Components.

6.7.3 Military Personnel Costs. As a rule, the applicable

military personnel appropriations must fund the cost of direct (and indirect) military labor incurred in the performance of a service for, or the furnishing of materials to, another DoD Component user.

6.8 Non-DoD Component Users.

6.8.1 Non-DoD Component users are to be charged and must

reimburse MRTFB activities for all direct costs readily identifiable with a particular program or customer order.

6.8.2 MRTFB commanders may charge non-DoD Component users an

appropriate level of indirect costs at their discretion. Any indirect costs incurred, but not billed to a user, must be billed to the MRTFB activity’s institutional or appropriated funding. Appropriated funding levels, however, must not be increased to finance any additional indirect cost incurred due to sales to non-DoD activities.

6.9 Under rare circumstances, non-DoD customers (such as

commercial entities) who can demonstrate through a Performance Work Statement, Statement of Work, or other official contract materials that they are under contract to develop a system for use specifically by the DoD should be charged DoD rates (i.e., direct but not indirect costs). The intent is to charge rates according to which entity (DoD versus non-DoD) will be the end user of the items under test, not who in the near term is paying for the test services. The official documentation that identifies the non-DoD entity’s contract to develop the system for the DoD must be attached to the JITC Cost Estimate (CE) as it is routed for approval. Non-DoD entities that develop products they hope to market to or are under consideration by the DoD shall be charged both direct and indirect costs for JITC test support.

6.10 Certain Federal, non-DoD customers, can be charged DoD

rates (i.e., direct but not indirect costs) because their systems have direct interface to DoD systems and both Departments have an interwoven relationship and mission. JITC has determined that the Department of Homeland Security meets this criteria and shall be charged DoD rates. Additional exceptions to allow Federal, non-DoD customers to be charged DoD rates should be worked through JITC’s MRTFB Program Controls Branch for Command approval.

6.11 JITC leadership must ensure that negative Government labor charges (Government labor hours that are not chargeable to reimbursable efforts) do not exceed a reasonable amount, estimated at 20 hours per reimbursable effort for new, potential customers.

6.12 Rare exceptions to allow JITC to incur a minimum amount of Government (not contractor) labor charges, estimated at a maximum of 80 hours, prior to receipt of funding and/or a fully signed support agreement from an existing customer should be carefully reviewed prior to approval by Division and Command leadership.

7. Cost Estimating Procedures.

7.1 JITC AOs will not charge their new reimbursable customers for labor associated with developing the initial CE. These labor charges should be viewed as “costs of doing business,” and will be paid for with existing JITC mission funds.

7.2 All reimbursable customer orders will have an associated

CE, developed using JITC’s Cost Estimating Tool. Instructions for using JITC’s Cost Estimating tool are provided within the tool itself.

7.3 CEs can be created for a three-year period to align with

the accompanying support agreement.

7.4 To avoid having to renegotiate civilian labor costs in the case of a project that transfers from a military AO to a civilian AO, CEs will reflect the appropriate amount of civilian labor costs if there is a possibility that the military AO may be replaced by a civilian AO during the period of performance designated on the CE.

7.5 When final costs are agreed upon and documented in a

support agreement, the AO submits a CE, in conjunction with the support agreement, for approval through proper channels.

7.6 CE Revisions.

7.6.1 CEs must be revised if the cost of service varies by 10 percent or more than the estimated costs. This can occur if a CE is submitted prior to release of new rates and policies for a new fiscal year (FY) ; if there is a variance between the total amount of the estimate and the actual funding that the customer sends; or if the estimated contractor support at task award differs 10 percent or more than from the Government’s estimate.

The route and review process for a revised CE is the same for an initial CE.

7.6.2 If the variance between the CE and cost of service is

less than 10 percent, DISA’s financial office supporting JITC (Resource Management 31 (RM31)) can make a change to the original CE after coordination with the AO.

8. Reimbursable Customer Agreements. IAW DoDI 4000.19, MRTFB activities and DoD or Non-DoD Federal Component users must use support agreements to document and establish the General Terms and Conditions between buyers and sellers for all inter- and intra-governmental reimbursable transactions.

8.1 A fully signed agreement is required before any work by

JITC may begin. Requests for waivers to this policy must be coordinated through the MRTFB Program Controls Branch for Command approval.

8.2 For DISA, other DoD, and Federal customer support, AOs

should coordinate the appropriate agreement type with the JITC Support Agreement Manager who will guide the AO through the agreement development process. DISAI 640-50-06, “Support Agreements” prescribes policy, assigns responsibility, and outlines duties for preparing, coordinating, and modifying support agreements and is available at:

https://disa.deps.mil/org/JT2/JT2B/JITC%20Agreements/Guidance%20 and%20Policy%20Documents.

8.3 The written agreement requirement for commercial vendor

services is satisfied with a Cooperative Research and Development Agreement (CRADA). CRADA instructions, checklists, templates, examples, and additional guidance are documented in JITCI 640-50-07, “JITC Cooperative Research and Development Agreements” available at:

https://disa.deps.mil/org/JT2/JT2B/JT2B%20Public%20LIbrary/CRADA s.

8.4 If a customer requires more cost detail than is provided in the support agreement, the AO should coordinate with the MRTFB Program Controls Branch prior to release of any additional cost information, such as contractor labor rates.

8.5 Support agreements for all other customer types, e.g., state or foreign governments, should be coordinated with the MRTFB Program Controls Branch to identify the appropriate documentation requirements.

9. Financial Policy.

9.1 Customer funds are received via MIPR, vendor check, or

generally accepted document. Rates and policies in effect in the FY in which funding is received by the MRTFB will apply to all new and incrementally funded projects.

9.2 JITC must receive a reimbursable customer’s funds prior to start of the task. If incrementally funded, and after approval of the official CE, the RM31 Budget Analyst will coordinate with AO to determine how the incremental funds are to be allocated.

9.3 AOs are responsible for monitoring all funding associated with their projects and ensuring the customer understands that actual costs of providing the service or support will be billed and that all costs included in the support agreement are estimates and actual costs may vary by plus or minus 10 percent.

9.3.1 Project slippage due to customer requirements that result in the need for additional funding will be paid for by the customer. If at or greater than 10 percent, a revised CE and amended support agreement will be required to document the additional funds.

9.3.2 If actual costs are less than the amount provided by the customer, the AO will coordinate with RM31 and the customer to return the balance in an expeditious manner. This is particularly important when customer funding expires in the current fiscal year (FY). It is critical that AOs coordinate the return of excess funds with their RM31 Budget Analyst in time to allow their customers the opportunity to use that funding elsewhere. Information relating to the return of customer funds is not to be communicated to the customer until RM31 has given final approval.

9.3.3 Redirecting excess funds to an unrelated project is not appropriate and does not meet the “initial intent” or “bona fide need” rule. Redirecting funds between related programs requires written customer approval and will be addressed by JITC’s MRTFB Program Controls Branch and RM31 on a case-by-case basis.

9.3.4 The AO must coordinate with the support contractor to

make sure that all costs, to include those not yet reported in JITC’s accounting system, are included in the closeout. Other pertinent data for the closeout may be obtained from RM31.

10. Responsibility.

10.1 The JITC AO will:

10.1.1 Create a CE and support agreement documenting all

reimbursable test support prior to receipt of the reimbursable funding and issuance of a new task order.

10.1.2 Obtain customer acceptance of the proposed support and estimated costs and attach the fully signed support agreement to their CE.

10.1.3 Digitally sign the CE and forward it with the attached fully signed support agreement to their Branch Chief and/or Division Chief.

10.1.4 Monitor funding execution on their tasks throughout the lifecycle of their test effort and coordinate with their customer if additional funds are required or to return excess funding in an expeditious manner.

10.2 The Branch Chief and/or Division Chief will:

10.2.1 Review the CE and support agreement for accuracy and

completeness.

10.2.2 Digitally sign the CE, coordinating any changes with the AO as required.

10.2.3 Regularly review reimbursable funding amounts for the

tasks within their cost center to ensure that reimbursable funding is being committed and obligated and excess amounts are returned to the customer in time to allow their customers the opportunity to use that funding elsewhere.

10.3 JITC’s MRTFB Program Controls Branch will:

10.3.1 Coordinate with RM31 to annually review estimated

Government labor rates and fees and update them as appropriate in accordance with rate and fee policies provided in the FMR and OPM salary tables.

10.3.2 Review all CEs for MRTFB compliance and completeness.

10.3.3 Manage the Command’s MRTFB charge policy, CE, and

support agreement processes.

Digitally signed by

ROBERTS.SHAWN.ALLE

WN.ALLEN.11 N.1135501871

35501871 Date: 2019.01.23 10:52:42 -07'00'

SHAWN ROBERTS

CAPTAIN, USN

Commanding

SUMMARY OF SIGNIFICANT CHANGES. Changes were made throughout the instruction to align with DoDI 4000.19, Support Agreement and updated FMR guidance, update hyperlinks and dates of reference documents, and update JITC’s labor rates in the Enclosure.

*This Instruction supersedes JITCI 650-70-01, October 8, 2014

OPR: JT1B

DIST: All JITC Government Personnel

ROBERTS.SHA

JITC’s Reimbursable Charge Categories and Fees

1. Labor and fee updates. Prior to the start of a new FY, the MRTFB Program Controls Branch coordinates with RM31 to identify any necessary updates to the estimated hourly Government labor rate and applicable fees. The fees provided in this attachment are subject to change.

2. Government Labor. Government civilian labor includes all hours of the government civilian AO, including estimates for overtime. Estimates should include hours for any other JITC civilian personnel, such as those who manage JITC’s testbeds, who will support the program. Government labor rates are in accordance with DoD FMR, Vol 11A, Chapter 1; DoD FMR, Vol 15, Appendix C; and DoD FMR/Financial Management Topics/DoD Reimbursable Rates. Hourly rates for customers are determined through use of OPM Salary Tables of average JITC testing employee grade/step, standard work years, standard leave, projected awards, and holiday and fringe benefits. The different rates for JITC personnel are due to variations in locality rates per the OPM Salary Tables. Non-Federal customers are charged a higher holiday and fringe benefit rate than are Federal customers. Current hourly Government labor rates follow:

FY19

Federal Non-Federal Customer Customer

Fort Huachuca, AZ $75 $79 Fort George G. Meade, MD $82 $86

3. Government Purchases. Customers will be charged actual costs for government travel, equipment, supplies, equipment, outgoing MIPRs, etc., that can be directly attributed to their reimbursable project. Government travel costs include airfare, per diem, and miscellaneous expenses and are in accordance with Joint Travel Regulations.

4. Contract Costs.

4.1 Contractor Labor. Contractor labor rates are available in JITC’s CE tool. Contractor rates vary due to differences in labor categories and contract periods. Contractor labor costs are actual costs of the specific contractor personnel charging to the reimbursable project.

Enclosure

4.2 Contractor Other Direct Costs (ODCs). Customers are

charged the actual contractor costs of equipment, supplies, subcontractor labor, and travel. Contractor travel costs include airfare, per diem, and miscellaneous expenses and are in accordance with Joint Travel Regulations.

5. Fees.

5.1 Fixed Fee. JITC has both cost plus fixed fee and firm

fixed price tasks. On cost plus fixed fee tasks, the contractor is paid for all of its allowed expenses plus additional payment (fixed fee) to allow for a profit. The fixed fee amount is computed against the contractor labor costs and on JITC’s Test, Evaluation, and Certification contract, has a maximum of 7 percent. Fixed fee is a direct charge and DoD and Non-DoD customers are charged fixed fee on cost plus fixed fee tasks.

Firm fixed price tasks have profit embedded in the total amount bid for the effort.

5.2 DITCO Fee. This fee is a direct charge incurred by DITCO

customers under the DISA Defense Working Capital Fund (DWCF).

Because JITC is supported by DITCO, this direct charge applies to JITC DoD and non-DoD customers. The current DITCO fee is 2.5 percent of government purchases over $3,500, contractor labor, contractor travel, fixed fee (if applicable), and other direct charges.

5.3 Overhead Costs. Overhead costs include costs associated

with base operations, supplies, copiers, facilities, security, network operations, etc. Overhead costs are considered an indirect cost and are not chargeable to DoD customers. For FY19, the rate for overhead costs for Non-DoD customers is 42 percent.