Manual Exhibit 6-3-E

Allocation of Pool No. 3 Funds against Overall
Contract Support Cost Shortfall for Ongoing Contracts
(Bottom-Up Plus Proportionate Distribution)

 

The purpose of this allocation of funding needed for all Public Law (P.L.) 93-638 compacts and contracts is to provide for an equitable allocation of available appropriated resources when considering the overall level of contract support costs (CSC) need currently being funded each awardee eligible for increased CSC funding, The allocation of Pool No. 3funding by this methodology will:  

  • allocate 50 percent of available CSC shortfall funds to those awardees with the greatest CSC shortfalls in order to raise the minimum level of CSC funded to the highest level possible (a bottom-up approach);
     

  • allocate 50 percent of the available CSC shortfall funds to all P.L. 93-638 contractors and compactors that have a CSC shortfall; and
     

  • provide relatively larger increases to those with the greatest shortfalls, thus decreasing variations in overall CSC shortfall percentages among all awardees by providing larger payments to those with the lowest percentage of their overall CSC need funded, while at the same time moving all awardees closer to 100percent funding.

The Headquarters allocation of Pool No. 3 funds will be made according to the following methodology:

 
(1) As soon as possible in the FY, but not later than March 30 the amount of the ongoing CSC requirements will be computed from the data provided in Section 6-3.5, “Contract Support Costs Shortfall Report,” of this chapter.

 
(2) The percentage of CSC funding available for paying CSC shortfalls will be computed by dividing the total funding available for CSC shortfall by the requirement for ongoing CSC shortfall identified above.

 
(3) Fifty percent of the amount available for Pool No. 3 will be allocated to those awardees with the greatest CSC percentage shortfall in such a way as to raise the minimum level of CSC funded to the maximum percentage possible (a bottom-up approach).

 
(4) After making the allocation required in paragraph (3) above, the remaining 50 percent of the amount available for Pool No. 3 shall be allocated proportionately to all awardees with a CSC shortfall.

 
(5) The allocation methodology for paragraph (4) above can be described mathematically as follows:

 
  Fs= (ACSC1_ ACSCa)  *  (Pool 3 /(TCSCr-TCSCa))

Where:

FS =  New CSC shortfall funding to be received for any awardee.

ACSCr =  Total ongoing CSC requirement for the awardee (after the allocation under paragraph (3) above).

ACSCa =  Total ongoing CSC available for the awardee (after the allocation under paragraph 3 above).

TCSCr =  Total ongoing CSC requirement for all awardees (after the allocation under paragraph 3 above).

TCSCa = Total CSC funding available for all awardees (after the allocation under paragraph 3 above).

An example of this allocation methodology follows.  The example assumes that eight awardees have approved total CSC requirements (TCSCr for the fiscal year totaling $41 million.  The total CSC shortfall for the eight awardees is $9,459,500, and the total CSC funding available (TCSCa for CSC shortfalls under Pool No. 3 is $5million.

 

Bottom-Up Distribution of First

Tribe Total CSC
Need		 Available
CSC Funding		 Percent of
CSC Need
Funded		 Minimum
Percent of
CSC Fundable		 Bottom-Up
Distribution of
First 50 percent		 New Total
CSC Funded		 New percent
of CSC Need
Funded

Tribe 1
$5,000,000
$4,900,000
98.00%
80.14%
-
$4,900,000
98.00%
Tribe 2 $1,000,000 $250,000 25.00% 80.14% $551,436 $801,436 80.14%
Tribe 3 $500,000 $288,000 57.60% 80.14% $112,718 $400,718 80.14%
Tribe 4 $4,000,000 $3,280,000 82.00% 80.14% - $3,280,000 82.00%
Tribe 5 $12,500,000 $10,232,500 81.86% 80.14% - $10,232,500 81.86%
Tribe 6 $7,000,000 $5,160,000 73.71% 80.14% $450,051 $5,610,051 80.14%
Tribe 7 $5,000,000 $3,880,000 77.60% 80.14% $127,180 $4,007,180 80.14%
Tribe 8 $6,000,000 $3,550,000 59.17% 80.14% $1,258,615 $4,808,615 80.14%
  $41,000,000 $31,540,500 76.93% 80.14% $2,500,000 $34,040,500 83.03%

 

Break Point % 80.14%        
Available for Bottom-Up Allocation $2,500,000        

 

Proportionate Distribution of Remaining

Tribe Total CSC
Need		 Available
CSC Funding
(After Bottom-Up)		 Percent of
CSC Need
Funded		 CSC
Shortfall
(Unfunded Need)		 Proportionate
Distribution of
First 50 percent		 Final Total
CSC Funded		 Final Percent
of CSC Need
Funded

Tribe 1
$5,000,000
$4,900,000
98.00%
$100,000
$35,922
$4,935,922
98.72%
Tribe 2 $1,000,000 $801,436 80.14% $198,564 $71,328 $872,764 87.28%
Tribe 3 $500,000 $400,718 80.14% $99,282 $35,664 $436,382 87.28%
Tribe 4 $4,000,000 $3,280,000 82.00% $720,000 $258,639 $3,538,639 88.47%
Tribe 5 $12,500,000 $10,232,500 81.86% $2,267,500 $814,534 $11,047,034 88.38%
Tribe 6 $7,000,000 $5,610,051 80.14% $1,389,949 $499,299 $6,109,350 87.28%
Tribe 7 $5,000,000 $4,007,180 80.14% $992,821 $356,642 $4,363,822 87.28%
Tribe 8 $6,000,000 $4,808,615 80.14% $1,191,385 $427,971 $5,236,586 87.28%
  $41,000,000 $34,040,500 83.03% $6,959,500 $2,500,000 $36,540,500 89.12%
%of Shortfall to be funded 35.92%        
Available for Proportionate Allocation $2,500,000        

All awardees on the list would receive some funding for their CSC shortfalls for the FY.  Only those awardees with less than 80.14 percent of their CSC need funded would receive a payment from the distribution of the first 50 percent.  All awardees would receive funds in proportion to the existing CSC shortfall of the remaining 50 percent of available Pool No. 3 funds.  After the shortfall allocation, the range of funded shortfall for all awardees in the group narrows to between 87 percent and 99 percent.