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We are a subcontractor for a multi-year FFP DoD contract. Our Prime was awarded an Order under Basic Ordering Agreement (BOA). The award to the Prime was non-competitive, as the Order supports a pre-existing Contract for which the Prime, ourselves and our subcontractors are the only sources with the requisite knowledge, experience, and technical expertise to provide the required supplies and services under the Order. The Prime has asked for the T&M proposal for our participation. We have historically avoided T&M efforts but the proposal scope is too broad for us and our suppliers to provide a traditional FFP for the effort. Our participation alone and the participation of several subcontractors will exceed $150,000. I have many questions but I’ll limit it two; I suspect the response may help answer the others. 1) Based 16.601(c)(2)(ii), do I understand correctly that we need to provide the hourly rates for ourselves and the hourly labor rates for each of our subcontractors separately? My understanding is the lack of competition restricts us from submitting blended labor category rates. 2) If I’ve understood the first, how do I capture the overhead costs related to subcontractor management? We don’t have a standalone role/position of subcontract manager, that task is shared between PM and CM. Can I add a fixed fee (e.g. 10%) to all subcontractor hourly rates? We’re still waiting on rates from our subs, in the interim can we bookmark the proposal by stating “xxxx will invoice at the subcontractor rates plus 10%.”? I’m hesitant with this approach and uncertain whether it would create a prohibited CPPC. A few notes: (1) we and the majority of our subcontractors are not supply COTS or Commercial Items; (2) no Materials will be provided – a technical labor effort; 52.216-30 was not included in the flowdowns. As always, appreciate the feedback and support from this forum.
I issued a request for pricing for a sole source single award IDIQ contract for services with a five year ordering period. In Section B the contract required fully burdened labor rates for each year of the contract to be used for T&M type orders and FFP type orders. The contractor refuses to provide fully burdened rates for FFP orders stating labor rates are not relevant to the FFP contract value and this approach places significant risk to the contractor. They also argue this approach is not aligned with FAR since they cannot provide a certificate of current cost and pricing data for applicable orders when using out year rates that may be different from actual current labor rates at the time of placing an order. I don't understand what the difference is between establishing labor rates for any contract type and establishing rates in a FPRA. Their position that the labor rates are not relevant to the total value is not totally sound to me as the established rates would be used against the contractor's proposed level of effort that would build to the total FFP value. All GSA Schedules have burdened rates used when developing FFP orders and I've also seen this done on BPAs. I offered to negotiate separate T&M rates from the FFP rates because to me the only difference is profit but this was still unsatisfactory. I don't understand why this is a hard pressed issue for the contractor. I think this is a standard practice to negotiate labor rates for up to five years as is done with GSA and DCMA. Is there any reason why it's not appropriate to negotiate fully burdened rates for FFP orders? Is the contractor's claim about certified cost and pricing data true?
Good morning and happy EOFY16. I'm interested in knowing how other construction teams structure their IDIQs in terms of reconciling RS Means labor rates with Prevailing wage labor rates (assuming RS Means is the required pre-priced UPB required under contract). Here are my assumptions: I've looked through the RS Means cost data labor rates at the back of each cost data book and note that the national union rates are generally up or down, but mostly below prevailing wages. I've noted that RS Means uses a City Cost Index (CCI) to apply a rate adjustment based on locality which is often a rate increase per locale, but often after application, the wage is still under the prevailing wage (under the latest Construction Wage Rate). I understand that using RS Means comes with issues and there is an ongoing debate about whether it saves the Government money (I understand many feel RS Means prices are inflated and does not save the Government money). So I've been perusing SABER IDIQ Specifications/Statement of Works that incorporate RS Means as a UPB and Costworks, or e4Clicks as the estimator (or Timberline for older specs). I see a lot of the specifications request that the contractor use total bare costs, based on national average rates, defined by the RS Means price books. What I hear from contractors is that these rates do not often match the prevailing wages, and so they are forced to provide "extra" labor hours to compensate for the cost of the prevailing wage they are operating under. I've heard it's possible to integrate a custom set of labor rates depending on the estimator a contractor or agency is using (such as plugging in prevailing wage rates in the estimator of choice) but I haven't actually seen this laid out in a Spec/SOW example. My question is, how are your agencies handling this issue (is it a issue?), or is there a generally accepted better method to pre-price construction projects than using RS Means that your agency is using? I admit I may not fully understand all of the issues with using RS Means so please understand I am on the learning curve.