Mannaf

The scope is defined and each CLIN has a ceiling for the effort.

Thanks for the clarification. For this particular effort the LOE is given for the purpose of evaluation. And TO will be issued as per CLIN ceiling requirement.

@Vern Edwards Yes, all assumptions your made in response to my question are accurate. FAR 16.601 (b)(1) states, "Direct labor hours at specified fixed hourly rates that include wages, overhead, general and administrative expenses, and profit". So, based on that my read is T&M rate is a fixed type labor rate and should not be subject to probable cost adjustment for the purpose of evaluation! However, I'm not sure I'm clear about the last comment you made regarding realism of ceiling price? If you can elaborate, please, that would be helpful. Thank you.

How would you treat a T&M rate proposed by a subcontractor during cost evaluation for award under a CPFF type contract? This is a competitive effort and the prime submitted some of its subcontractor proposed labor rates as T&M rate. So, my question is can I make probable cost adjustment to the subcontractor proposed T&M rate for the purpose of cost realism evaluation?