Search the Community
Showing results for tags 'cost of performance'.
Reference FAR 52.219-14 (and similar clauses). I've seen several threads in this forum discussing the calculation methodology for determining the “cost of performance incurred for personnel”. I found the “Is this Professor right?” thread (started by contractor100 on 3/23/12) to be particularly informative and, in my humble view, conclusive as to how I have been calculating such costs (Vern's #25, alternate method). So I need to throw a hypothetical situation out there that I may find myself in soon. On a FFP contract (with resulting FFP subcontracts) I may not have visibility into my subcontractor’s direct labor cost, only an agreed billing rate. How can I credibly calculate the “cost of performance incurred for personnel” if the only data I have from a FFP subcontractor is the total burdened cost of labor? Extending the hypothetical for just a minute, what if I didn't even have the burdened labor rate and purely a FFP subcontract total cost (labor and materials)? To put this in perspective, say I hire Vernon J. Edwards, Consultant, LLC to assist in contract performance. I pay the LLC $500/hr for services rendered. How could I account for the “cost of performance incurred for personnel” for these services if I have no further data than Vern's external billing rate? Although it may be inevitable, I don’t mean to get into the nuances of whether or not the LLC (or S-Corp where an owner is performing the work) actually pays a salary to the individual. That is a topic for a different thread.