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  1. I recently received feedback on a T&M proposal that is prompting my question about fee maximums on time and material contracts. We had to submit a breakdown of the proposed labor categories which included the rate buildup and proposed fee. The proposal was made up of prime and subcontract labor and each category was clearly identified in the file. A fee percentage (greater than 10%) was put on prime labor while a lesser percentage was added to subcontractor labor. The contracting officer has referenced FAR 15.404-4(d)(1)(ii)(C) and advised that fee shouldn't exceed 10%. My understanding is that the maximum referenced in that clause is a contract maximum, not a limitation on each element of cost. Do you agree?