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About simplemiz

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  1. Yes, growth is additional work within the scope of the contract.
  2. We're not in pre-award environment, we're in post-award and I'm administering a multi-option contract. The prime uses an approved forward pricing rate agreement but the subs are competed and selected when an option is exercised. There are no contractually stipulated rates for the subs. The reason I had the title as "buying-in" is because we noticed (through previous exercised options) that some subs' final price if calculated, does not equate to the rate proposed in the basic multiplied by the labor hours being proposed to accomplish the growth work. That's when it was revealed that the delta comes from the Profit and G&A being added in growth work, it isn't just the straight calculation of labor hours x rate anymore as quoted during competition. The Prime insists that it's the risk the subs take as FFP contractors since growth work, is not always guaranteed. However, as mentioned above, the subs rates were not contractually stipulated in the basic contract or when the option was exercised. And since work had already started (ie open & inspect then report the issue, then repair), it became more costly to leave an equipment unrepaired to argue a point. It was more prudent to settle the matter and allow the contractors to complete the work. So, I understand your reasoning, however, with the additional information provided, do you still think the government should quit asking the prime to verify the sub's rate?
  3. I just wanted to make sure I've got all my bases covered. They argued that since the subs are FFP, we essentially cannot look at their rates, just the bottom line price. However, since we all knew the requirements would grow, I wanted to make sure the issue on growth rates were ironed out in the beginning. We've had issues before where we didn't have the growth rates specified and the KTRs would use "internal" forward pricing agreements (agreements between the prime & the subs) as justification for proposing at higher rates on growth work. So now they are using "common practice" as justification which I told them were insufficient justification. I wanted to make sure that before I issue a unilateral mod, that I actually am right in my assessment about the sub's bid rates.
  4. Our prime (on CPIF/CPAF contract) insists that since their subs are FFP, we cannot look at their rates if competitively bid, which I agree 100%. However, a lot of our actions (in ship repair) are open & inspects, (then repair) that can grow significantly. In our initial RFP, I added a verbiage that bid rates will be the rates used for growths (so it should be fully burdened). One of the subs that won are using their bid rates but are now adding 30% G&A and 10% profit into their growth pricing, their initial bid did not include these rates. If I were to recalculate their bids and add those rates into their basic bid, they would have lost the basic bid. However, the prime insists that since they are FFP, they have the right to add these additional rates into the growth (calling it "common practice"). I’m arguing that this is a “buying-in” case but I cannot find anything on GAO that can support my argument. I would like the sub to use ONLY their basic bid rate in any and all growths since other FFP subs that bid in the basic also included their G&As and Profit rates. Am I wrong to question a sub’s growth rate and insist on them using their bid rate? Your help is appreciated.