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PSW

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  1. If you propose adding the "overall wrap rate" to your subcontractor's direct labor, the fact that the direct labor is part of the base that determines the overall wrap rate is an important consideration and likely what the cost/price analyst will want to know if they get to that level of a review of your rates. However, since you will be proposing fixed rates for a T&M contract, you will also be considering other factors such as perceived value to the customer, competition, etc. 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.
  2. The only example of this that I have seen was where the individual's supervisor declined to send the ratification request forward to the Contracting Officer. The individual had purchased a piece of artwork for the office without prior approval and her supervisor declined her request to have the government pay for it. That seems to be the only time the ratification requests get denied. Even when the Contracting Officer recommends denial they get approved by senior management.
  3. Another consideration is under what authority the Contracting Officer plans to extend the contract by six months. If they are using 52.217-8 Option to Extend Services, which is a popular method of getting six more months out of services contracts, the clause limits the services to "within the limits and at the rates specified in the contract." I have always seen that interpreted to mean that the terms and conditions of the contract as they stand, including the work being performed, are continued as is. This is usually not in the contractor's favor as it means that unless the prevailing labor rates warrant an increase, the rates stay the same when they would ordinarily have the potential for an increase.
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