BostonStrong

Appreciate the input.

I should have articulated my question a little better...was working a deadline and didn't do a good job coloring in the whole picture. I understand FCCOM is considered a cost. However, the reason I'm asking the question is that DD1547 adds both FCCOM and "Profit" together to generate a "Mark-up Rate". So, in spite of FCCOM technically being a cost, DoD seems to be treating it as profit when calculating the percentage. This strikes me as odd. And it's important because if I hear that a particular agency awards certain types of contracts in a particular range, or has never awarded a contract with a profit greater than X%, then I need to understand whether contracting officers traditionally include FCCOM when discussing mark-up ranges. I work in an industry where FCCOM is a big number. Hope that helps clarify my question.

When profit percentages are quoted, is Facilities Capital Cost of Money (FCCOM) assumed to be in profit? For instance, if someone says profit on cost type contracts is generally in the 6-8% range, is it assumed that FCCOM is counted as profit?

I very much appreciate all the input. It helps.

Exactly Neil. Many times, a subcontractor has to advocate for itself and educate the prime that what they're asking for is not required or needed. Of course, it needs to be done in a healthy client-focused way. But that's why I'm asking the question. My first objective is to inform our team that this is not a requirement and then we try to figure out how to approach a potential customer with a good reason why they don't need cost or pricing data. Many of the folks we deal with are not subscribed to Wifcon so they are flying in the dark, lol.

I care because prime contractors (more specifically, the folks responsible for letting subcontracts) tend to default to a cost-based procurement when dealing with subcontractors even when the prime contract qualified for the adequate price competition / commercial item exemptions. I'm much more interested in a scenario where the prime is a commercial item because that's our immediate situation. I threw in the adequate price competition scenario but maybe should have limited it to a commercial item scenario to be a more targeted question. So...ideally...it would be very helpful if there was a line of logic that we could use to inform the prime contractor that, because their contract is a commercial item, so are any subcontracts. And, that means we don't have to do the cost/pricing dance with them. I'm wondering about this because how can a commercial item for a prime contract have subcontracts for parts that are not commercial item?

I searched the forums for my question but didn't find anything that would help. Here's my question: if a prime contract is a commercial item, are subcontracts under that prime also considered commercial items? Swap out "commercial item" above with "adequate price competition", same result? In other words, if a prime contract qualifies for the adequate price competition exemption, does the subcontract qualify for the same exemption? I realize that, if the adequate price competition exemption applied to a prime contract, a subcontractor might want to claim the commercial item exemption (if they can) to further limit flow down clauses. Any input is greatly appreciated!

Just did, thanks very much. Hmm...is it that straightforward? I certainly hope so. Given my scenario above, are there any other significant contracting laws or regulations that we'd have to comply with if we move forward with the scenario I described above? Very much appreciate your guidance.

A big shout-out to Don for constructing the matrix, very helpful indeed. I watched the video but I’m not entirely sure of how to use the matrix for my particular situation. Let’s say my company has decided to chase Federal business opportunities as a subcontractor. And, let’s say our products meet the commercial item definition. Assume further that the prime contract is a $100M fixed price contract with no exemptions, subject to CAS, etc. Further, let’s say the subcontract in this case has a value of $5M which is under the Simplified Acquisition Threshold for commercial items. How do I use the matrix to determine which clauses (A, R, O, etc) the prime contractor should flow down to my company? Is it as follows?: 1. Fixed Price column (exclude blanks) 2. Commercial Item (include blanks as they represent possible Customer Commercial Practice) 3. SAP (exclude blanks) 4. Subcontract Flowdown (exclude blanks) Thank you for any help you can provide. This website is an excellent source of information!