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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.