Overview
This section prescribes the monetary thresholds and administrative responsibilities for service contractor reporting. It establishes the criteria for which contracts and subcontracts must report labor hours and costs to support the development of annual agency service contract inventories.
Key Rules
- Applicability: Reporting is required for service contracts and first-tier subcontracts for services, including orders under indefinite-delivery contracts (IDIQ, FSS, GWAC, and MAC).
- Thresholds for Cost-Reimbursement, T&M, and Labor-Hour: Reporting is mandatory for all such contracts and orders with an estimated total value exceeding the simplified acquisition threshold.
- Thresholds for Fixed-Price: For awards made in Fiscal Year 2016 and subsequent years, reporting is required for all fixed-price service contracts and orders with an estimated total value of $500,000 or greater.
- Subcontractor Reporting: The same thresholds and contract types that trigger prime contractor reporting also apply to first-tier subcontracts for services.
- Review Timeline: Agencies must review contractor data for reasonableness by November 15; contractors must finalize any necessary revisions or provide rationale by November 30.
- Agency Inventory: Agencies must submit an annual inventory of service contracts to OMB by January 15 and publish a Notice of Availability in the Federal Register by February 15.
Practical Implications
- Contractors must ensure they have internal systems capable of capturing and reporting direct labor hours and associated costs for both their own performance and that of their first-tier subcontractors.
- The transition of reporting thresholds over time (lowering to $500,000 for fixed-price) means a significantly larger volume of mid-market service contracts are now subject to these compliance requirements than in previous years.