contractsmgr

1. I view the subcontractors rate (whatever that is) as a cost to me. therefore they should not have to break down their rate. It should be accepted as it is. 2. because the HWP was modified, it was a constructive change and as such, profit is allowable.

It is a FFP ship repair invoking: "HQ C-2-0029 HEAVY WEATHER PLAN (SERMC) (JUN 2016) ...In the event SERMC directs the Contractor to implement the HWP pursuant to NSI 009-69, the Contractor may submit to the Contracting Officer a request for reimbursement for costs resulting from such actions together with any documentation that the Contracting Officer may reasonably require. The Government shall reimburse the Contractor for all reasonable, allowable and allocable costs resulting from the Contractor's implementation of the HWP based on such Government direction. (End of Clause) " The invoked the HWP, and during the accomplishment of the HWP, required additional precautions be taken. Those additional precautions were directed by the Proj Manager, took additional time and resources and were not included in the accepted HWP. 2 subcontractors were also affected by this weather event. Prime submitted request for reimbursement came and gov't has stated: "Neither party controls the weather and neither party is at fault; therefore, it logically follows that neither party should profit at the expense of the other. The purpose of the HWP is to ensure the protection of the vessel and provide reasonable compensation to make the contractor whole; not to enrich the contractor." and additionally, "- Disallowed costs: Profit on material and subcontractor" The gov't has further requested a breakdown of the subcontractor rate to ensure they are also not receiving profit on the HWP implantation, however neither sub has DCAA audited rates, and now has to either provide pay rates of each employee or create a blended rate with the number of people/hrs expended and payments made. Both subs provided the same rate that they have provided with growth work to the base contract.

There has been much internal discussion between the govt and prime/sub contractors regarding profit being an allowable cost when directed to execute heavy weather plans for hurricanes, snow storms or the like. If the govt is directing work, why wouldn't profit be an allowable cost?