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CDOT Implements New Decoupling Process to Eliminate "Salary Gap" in Master Price Agreement

05-Jan-2017 to 11-Apr-2017

The CDOT Contracts and Market Analysis Branch recently released a memo that addresses the closure of the Appendix J process implemented during the fall of 2016, as well as the introduction of a decoupling of approval processes applied to Direct and Indirect Cost Rates. Since the requirement for professional services consultants to have a Master Price Agreement (MPA) was put in place, CDOT  has recognized that some consultants were experiencing a "gap" in full salary reimbursement due to employee raises being given during the term of an active Master Pricing Agreement (MPA). Since, under MPA rules, raises are only permitted at renewal, consultants were unable to recover full salary reimbursement due to this "gap". 

Last year, CDOT developed a short term solution using an Appendix J procedure which applies to eligible work performed during the 2016 calendar year. The Appendix J process will close on January 31, 2017 and no new submittals will be processed after this date. Effective January 1, 2017 a long term solution was put in place which is called "decoupling." Decoupling allows for the Indirect Cost Rate and the Direct Salary review to be separated. This provides consultants with the option to submit annual salary raises more in line with their corporate policy and allow for that raise to be approved prior to their annual MPA renewal date