The prime contract is a CPAF. Thus am I right to say that since it is a cost-reimbursable contract and our wrap rate build up includes SubK labor in our overall Direct Labor base then we will be doing a poor estimation in our cost proposal to not add in these fee's because they will end up showing up during the Incurred Cost submission anyway?
Also -- in response to where PSW stated: "As a customer getting charged more for the subcontractor's work than the prime's isn't going to set well unless I'm getting more for that uptick as well. Been there, paid more, didn't like it. " -- What is it preferred that a small prime contractor in a cheaper area of the country with a relatively low wrap rate do when they have very large contractors with a much higher wrap rate as part of there team? I'll try to illustrate this below (Hopefully it makes more sense):
Small Prime Contractor:
Position: XXXXX Analyst II
Compensation: $100.00 hourly
Wrap Rate: 1.60
Direct Labor Billable Rate: $160.00 hourly
Large SubK Contractor:
Position XXXXX Analyst II
Compensation: $90.00 hourly (just for example - lets say they have access to more qualified personnel for this position)
Wrap Rate: 2.00
Direct Labor Billable Rate to prime: $180.00 hourly
Small Prime's SubK Wrap: 1.30
Direct Labor Billable Rate To Government by Prime: $234.00 hourly
This is the problem that I am running into. This example was completely hypothetical but with our wrap rate being so low it is impossible to give a work share to big SubK's due to the rates looking extremely high.
If I am doing something wrong of if anyone has suggestions, disagreements, or anything PLEASE chime in. Everything is greatly appreciated.
-Phil