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Hello all, Senario: The requirement is an 8(a) sole source for construction and a FFP type contract is contemplated. the estimated value is 3-5million. The ktr has an OH rate of 14.95%. We normally see overhead in the range of 6-10%. The ktr has a 10% fee on top of all the subcontractor's markup. All of the proposal backup for subcontracted work only has the lump some numbers on the quotes provided. Question: 1. Is the 14.95% allowable can this be negotiated? 2. Can a prime (8(a)) get profit on profit? Im looking for a dumb down answer on this one. I have seen that some say this is allowable however I need a FAR reference to validate. I have seen some post on this topic but none are plainly clear or easily spelled out with a clear yes/no and have a direct reference provided. Also, I have seen some site the excessive pass-through clause, this only applies to cost reimbursement type contracts for civilian agencies. 3. Can the Excessive pass-though rationale be used for an FFP construction contract in a civilian agency? Would this be a deviation since far only says it can be used for cost reimbursement?
kellyz007 posted a topic in Contract Pricing Including CAS & Allowable CostsThis question is in regards to 8a sole source awards. FAR 19.202-6 both with respect to meeting the requirement at 19.806(B ) and in order to accurately estimate the current fair market price, contracting officers shall follow the procedures at 19.807. If I am understanding this correctly 19.807 is determining the fair market price or basically the price that an award is unreasonable however; FAR 19.806(B ) references using FAR 15.4 procedures for determining the price to be fair and reasonable. So fair market price is different from price reasonableness? I can use FAR 15.404 to negotiate lower prices? Example we have history of prior awards to the same company but the historical price reasonableness and fair market price were based on comparison to history. So there is never a real basis for determining the price reasonable. There is never competition. And the awards are always just under the $4M threshold and are split into 6 month increments.