general_correspondence

not accepted yet, but in case you haven't figured this out yet, it's my management that coached the subcontractor to change their fee. This is why I want to protect the subcontractor as well as our company during any audit. read the first paragraph of the document I put in the link . If the subcontractor is increasing fee erratically, not in conformance to its accounting principles, the definition and description of defective pricing is an issue.

Here 2 Help their are 2 issues, agreed, but they are related in that defective pricing is a concern to the prime due to what can be described as erratic Fee proposed. read the last bullet on page 21 of 28 https://www.acq.osd.mil/dpap/cpf/docs/contract_pricing_finance_guide/vol4_ch5.pdf

Neil both clauses 52.215-12, and 52.215-13, are in the Prime, and in the Subcontract. The government is not going to change the SOW. The government is apparently going to accept our recommendations into the SOW, but will not ask nor will they send RFP. The contract action is going to be the option period the government will exercise in next couple weeks, that carries our "recommendations" and cost/price for another XX months. The government intends to give us the money for the option period, but no scope change, and no RFP. The original option period had funding of ~100K. Our recommendation increased this. All this aside, I want correct myself on my original post, the subcontractor as not a sole source, it was competitive under the old rules of receiving only one Bid, 5 potential Offerors were solicited, only one returned an offer. certified cost and pricing data from our subcontractor, is probably not required, do you agree? the 35% jump in Fee is going up against a lot scrutiny. I already put together an incentive for the fee they want, very reasonable, but defective pricing creeps in when radical changes to what the firm typically offers, so it will help to know if certifying their costs are required. thanks

"Be limited to such Modifications" My DoD customer and prime contract has a 2M TINA threshold, so If I understand correctly, then based on the award and MOD amounts I provided a moment ago, CCCP IS NOT Required did I pass the test yet?

award 1.5M Mod 900k will this require a CCCPD ?

I am going with Yes, right Ji ?

I am reading FAR 52.215-10, and if the subcontractor increases their Fee by 35% - with no explanation as of yet, they may be putting themselves and us in a bad situation? thoughts? I intend to fact find and negotiate, I have adequate time before I begin negotiations

I apologize because I know this question has been answered before, but I looked all over WIFCON and cannot find the thread. We are the Prime, we were awarded a task order on our IDIQ, the award was over 20M, the award was competitive, certified cost and pricing data was not required, our award was based on adequate price competition. In our award winning proposal, was a subcontract valued under the TINA threshold. When the subcontract is Modified to a dollar threshold exceeding TINA, will certified cost and pricing data be required from the subcontractor? The subcontract award is sole source, and all the FAR 52.215 clauses are in the prime and subcontract agreements.

Retread, what is it you need me to clarify about my question "does the Fee remains fixed?" It's understood rates, escalation, and other factors effect costs on option years proposed, but if the subcontractor proposed fee the same in base and throughout, that's my question? I've never seen it, and it would have to be rare, to see the Fee on a subcontractors proposal change in the Option years, keep in mind, this is engineering services CPFF, not a construction contract.

In a CPFF with options, will the Fee remain fixed in Option periods ? We are the prime on a DoD contract that has a subcontractor who submitted a base year proposal, and an option year proposal approximately 12 months ago. The contract and subcontract are CPFF. There were some Scope changes from the customer that will require additional labor from our subcontractor, so an ECP came from the customer, and I sent an RFP to the subcontractor with the changes to incorporate into the option period. The subcontractor doubled the Fee in this proposal, with no explanation in the proposal. Just to be clear, the proposal submitted from this subcontractor 12 months ago had the Fixed Fee the same for both base year and Option period. I don't see how adding 2.5 FTE in the Option period would merit enough risk to double the Fee. The current value of the subcontract is 1.6M, and the option period was originally only 200K. With the ECP, the Option Period proposal price from the subcontractor went from ~200K, to 950K. The Labor hours appear appropriate, the rates are fair, but since Fee is always arbitrary to an extent, and in a CPFF if under 15%, it's fair game, has anyone else experienced or prepared or a negotiation when something like this happens?

49.202 Settlement Profit. So the guidelines I was told to follow is a mixed bag of 49.2, and 49.3 language, but I understand - everything I would do must fall within 49.3. To cut to the chase, can the subcontractor ask for Fee? Seems they would be asking for something unallowable, consequential . No? But it's my experience if you don't ask, you don't get, and in federally funded TfC's an adjusted and reasonable settlement can be agreed - doesn't matter what you call it. But the customer in this case will review the subcontractors settlement proposal - I don't believe they will delegate that to the prime entirely, so is Fee an allowed "thing" if it is negotiated?. Fee on cost, after termination is not what I am talking about. Fee on costs after termination is unallowable or hardly ever allowed unless I think it went through arbitration, I am talking about an ask for a sum of money and a method on how you came to ask for that sum of money.

if anticipated profits are not allowed, why does FAR 49.3 continue and repeatedly imply it could be if adjusted? for example, "The profit or Fee allowance is not imited to the rate contemplated at the time contract was executed. The negotiation of profit or Fee is based on at least the following additional factors (h) the rate of profit contractor would have earned at completion. on a CPFF, is the fixed fee considered anticipated? thanks

Ji, thanks for getting my bearings right - I need to stay away from FAR 49.2, and stick with 49.3

FAR 49.202-Profit I'm trying to get my head around " (a) The TCO shall allow profit on preparations made and work done by the contractor for the terminated portion of the contract. how can work be "done" on the terminated portion of a contract? I sorta comprehend "preparing" for work they would have executed in the terminated portion of the contract, but that tooo doesn't mean anything to me, it simply means those "hours' were already billed. ??

We are the prime, we received a TfC, and we terminated our CPFF subcontract same day. Termination letter we received from our customer notified us our termination is under FAR 52.249-6, and will follow guidelines in FAR Part 49. What is clear is anticipated profits and consequential damages for being terminated are not allowed. Does anyone have a a formula or tool to assist with calculating FAR 49.203 ( c ) (2) (i) and (ii) ?

Retread The problem is LOE type contract is undefined between prime and Sub. The LOE contract is widely understood not a completion contract. I already told the Sub, I am dropping the LOE, and a CPFF contract (plain ol CPFF) is what will be used, but in their revised proposal submission they came back stating "we will provide a CPFF LOE"

Anything is possible I suppose, but we are a prime contractor with a CPFF Completion contract. The sub we want to bring under insists on a CPFF LOE contract. I advised the sub "if we substitute hours, for work completion, we can define the LOE that way". I know it's not a lot of information, anyone have thoughts on this?

non commercial item

the proposed cost, is the same number as the total cost. they skipped over the profit portion. So retread, that means it looks like this: proposed cost: $ 2,000,001 Profit/Fee: ___________ Total: $2,000,001

thanks everyone, yes it is subject to certified cost and pricing, and yes Neil FAR 52.215-12 is in our prime contract, but if the subcontractor making the offeror skipped over the "profit" is their proposal non responsive, and non compliant?

We are a DoD prime contractor, and a subcontractor submitted a proposal to us. the Subs proposal is FFP , it exceeds 2M threshold, my question is in order to be compliant on the cover page with FAR 15.408, does the Fee need to be separated out from the quoted price, and the total price?

that's exactly right Joel and exactly what has happened here, it's a communication issue between Contracts and subcontracts within our Org thanks

I have asked my PM. And your assumption is correct, it has something to do with prime contract structure and funding. I understand how our customer can direct us (the prime) NTE limits on CLINS, but PM is saying this flowed down to subcontracts as well. I looked at how we proposed our task order, and it did have subcontractors costs broken down in each task, but how that relates to subcontract management of a CPFF subcontract is a matter of communication. News to me, especially since it wasn't a part of the direction or discussion when we awarded the subcontract.

we are a prime contractor and we have a CPFF task order from our government customer, and I issued a CPFF subcontract to support our task order. Eight (8) line items are on the subcontract, to align with the 8 different tasks in our task order SOW. the 8 lines on the subcontract are representative of how we proposed, which was a skill mix of labor to support each task. This is all labor subcontract, engineering services. Funding is running out on one of the subcontract line items, and I was going to move money off one line to another PM said we can't do that. My question is why can't we?

Thanks to what Bob Antonio uploaded to the Forum today, I was informed the CASB meeting today in DC is addressing the very issue I came up against.