muddypuddles

2 hours ago, Vern Edwards said:

Emphasis added:

muddypuddles:

The scant information that you provided about your acquisition is not sufficient to enable anyone to give you an informed opinion or sound advice about your prospective course of action. I saw your post earlier today, moments after you put it up, and ignored it for that very reason.

Unless you assert a copyright on that post, I intend to use it in an article I'm writing about how not to ask question.

I am embarrassed and flattered at the same time. If your article will help others on how to properly craft a question, then please use me.

I don't know how I can pose my question without providing a lengthy description of my scenario. I think my question would be better answered in a face to face forum where dialogue can be easily exchanged.

Thank you for the responses!

17 minutes ago, C Culham said:

So....

Solicitation for a FFP contract with option period(s), correct?   

Work is a service when labor rates and hours is the driving factor for pricing the work, correct?  

Service Contract Labor Standard wage determination in solicitation and resulting contract , correct?   

If all answers are yes then it would seem that contract clause 52.222-43 "shall" be in the solicitation/contract.   I am confused why you would also add an escalation rate to the contract as it would seem that 52.222-43 is the allowed escalation clause per the FAR with regard to labor rates?   

Also confused as to why labor hours might escalate  if a FFP contract.  I could see where their proposal might indicate why their price is effected by their proposed approach for an option period if they feel their hours will escalate but again still confused why you propose a set escalation in hours?   Isn't that left to the contractor under a FFP contract as to how they plan to approach the work?

I revised my original post. This is commercial and SCA does not apply. For clarification, escalation rate would be applied to labor rates, not labor hours.  

19 minutes ago, Todd Davis said:

I'd leave it up to each offeror to determine if they want to increase their pricing year-over-year, keep it flat, or decrease it.  Regardless of what they choose to do, if they are awarded a FFP contract, the rates would not be subject to an escalation, except for one that may be permitted by a service contract labor standards statute price adjustment clause in the contract. 

Having also worked in the private sector as a buyer, we didn't expect increases from our suppliers and service providers.  It was much to the contrary.  We expected sellers to find ways to offset cost pressures in materials, labor, and exchanges rates (as applicable).  So much so, that they would realize savings for their efforts and then share a portion of those savings each year with us as the buyer for having a business relationship for a certain amount of time with them.  This usually resulted in cost reductions year-over-year for a defined period of time.  

We did the same thing within our company for the products we sold.  We continually sought cost reductions through buying materials at a lower cost, making processes more efficient to reduce labor input, among other things. 

For whatever reason, in Government there is an expectation that the price should only go up.  I know there are cost pressures, especially on labor (pay raises, healthcare, etc.), but I would also often expect a contractor, depending on the nature of the procurement, to become more efficient.  I also know that some contractors become less profitable on contracts for various reasons, but some also become more profitable.

If you receive adequate price competition, you should have little price analysis to conduct, regardless if the price for each option stays the same, increases, or decreases.

I revised my original post to state that SCA does not apply and this is commercial. Did you communicate that somehow in your Section L that may have signaled to offerors that prices are not expected to increase? Or did you just rate them lower (giving a weakness) that the prices in the out years increased, thereby indicating there are no cost efficiencies being offered by the offeror...somehow?

32 minutes ago, Neil Roberts said:

My prime contractor supplier management view is this makes little or no sense. Potential suppliers have to be able to use their forecast and/or DCAA approved rates for outer years. 

Instead of requesting offerors to propose a specified escalation rate on their labor rates for the out years (remember, I am also allowing offerors to propose other than), would you prefer I request that you submit your DCAA approved rates with your price proposal?

Under a FFP competitive (commercial) contract, is it unfair (too restrictive) to tell Offeror's that they must apply a specific escalation rate on their option years as part of their pricing proposal (but also allowing them to offer other than the specified escalation rate with supporting narrative)? My goal is to reduce the amount of analysis I do on a FFP contract. I feel conducting a price analysis on labor rates and labor hours are sufficient to make a fair and reasonable determination and based on competition (assuming I receive competition).  My legal department does not object to this approach, but I wanted to see if others have an opinion on this matter or advice on how others may be analyzing option year rates under an FFP.

SCA does not apply.

46 minutes ago, Retreadfed said:

Why are you worrying about the number of hours that will be worked?  You said this was a FFP contract.  You did not say it is a level of effort contract.  If it is a contract to do a specific job, and the job gets done, haven't you got what you contracted for regardless of the number of hours it takes the contractor or what it costs the contractor to do that job?

Not sure "worrying" describes how I feel. I am trying to understand the nature of "proposed" vs. "actuals" in an FFP environment. Also, hours proposed and actual hours worked, even under a FFP contract, becomes very handy information when it comes to market research for follow-ons.

Thanks for the input. I get the idea!

23 minutes ago, Retreadfed said:

Muddy, I think you are making a lot of assumptions about the contractor's personnel policies.  You did not say whether the contractor employee will be subject to the FLSA or is in an exempt position.  Also, you did not say whether the SCA applied to this effort.  Assuming the employee is FLSA exempt and not covered by the SCA, contractors have great latitude in the way they use their employees.  Some contractors have a standard 45 hour week for FLSA exempt employees.  Also, you did not say that the contract will require the contractor to provide 130 hours of vacation time or what is included in that vacation time.  The amount of vacation time and holiday time a contractor grants to employees exempt from the SCA is largely a matter for the contractor.  Thus, if the contract does not require a specified amount of vacation time, it is up to the contractor as to what that will be.

You're right. I did/am.

SCA and FLSA does not apply in this case. And I didn't set requirements on employer to employee vacation package...

So, it sounds like I award at 2050, and hope the contractors work the hours.

53 minutes ago, Todd Davis said:

When you say "use of those procedures" you mean Part 13, correct?

Correct.

17 hours ago, joel hoffman said:

Muddy, please clarify - Does the statement of work prescribe a requirement for "1 FTE" to accomplish the task? 

Muddy, could the additional hours identified in the proposal include an allowance for supervision of the person(s)?  I have seen lump sum task orders or contracts where additional direct hours were proposed for company oversight, administration or supervision of a person working on a contract or task.

Muddy, please also clarify what you mean by a contract that is "structured with 12 months at a fixed price/lump sum".  Is it a 12 month duration contract for a lump sum price or is it something else?

Thanks, in advance.

Thank you!

No the PWS does not specify 1 FTE or number of required bodies.

The proposal did not provide information on the "rollup" of the proposed hours. I have not experienced a situation where additional hours are provided for another body providing oversight and it being rolled up onto one labor category. I have always seen a separate labor category, or slightly higher labor rates to include the 'additional' overhead expenses.

Yes, this is for a 12 month duration for a lump sum price. So we would basically award the contract at $100, 000. Instead of setting it up with QTY 1 x UP 100,000 = 100,000 (lump sum), I am setting it up as QTY 12 x UP 8333.33 = 100,000 (months).

SUPER THANK YOU TO ALL!

This requirement would fall under FAR 15 because it exceeds 150k, but Subpart 13.5 allows for use of those procedures for above SAT. Which confused me further.

Hello,

Can I use FAR 13.5 procedures and ask industry for a "proposal"? I was advised that FAR 13 procedures should request Quotes, and FAR 15 procedures should request proposals.

I have an 5.5M knowledge based services requirement that requires a Technical Capability write up, Staffing plan, and management plan. I would say this requirement is a little more complex than a 150k buy.

Hello,

I am contemplating a one-year FFP contract, structured with 12 months at a fixed price/lump sum. I have an IGE estimated at 2,020 hours for 1 FTE (salaried). Contractor proposed 2,050 to accomplish the task for that year at $100,000 . Overtime is not allowed. This is not set up as a LH contract or T&M. Given this scenario;

Question: 1) Can a FTE work more than 1,920, which I believe is the standard number of hours after required vacation? If so, and, Govt agrees 2,050 is reasonable, does this mean the Govt is compensating the FTE's vacation hours of 130 hrs even though the FTE doesn't use the vacation? What if the FTE ends up only working 2,000 hrs in that year? I assume the contractor will still get full payment of $100,000, correct?

Thanks for helping!