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Found 5 results

  1. 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?
  2. Can someone help clarify contract language and how that applies to markup? The language says "Trade contractor markup for Overhead is 10% and 4% for Profit. Trade contractor shall be limited to a 5% fee on its lower tier contractors." So if I am the trade contractor and I have a proposal from a lower tier contractor for materials and labor totaling $250,000. How do I calculate my markup? Is it +5% ($12,500.00). So now I am at $262,500 and add 10% for Overhead ($26,250.00) totaling $288,750. Now do I add the 4% ($11,500.00) so my final proposal is $300,250.00? So my markup total is $50,250? Or is there another way to interpret the language? Is this a standard for federal contracts to limit pass through costs? Any help would be greatly appreciated. Thanks.
  3. We are a small business. We work hard to keep our indirect costs low in order to be competitive. Recently we have seen a number of RFPs in which there is no labor category for a Program or Project Manager. One Army IDIQ RFP specifically calls for bidders to provide a Program Manager with defined tasking. When we asked why “Program Manager” was not among the 53 labor categories defined in the RFP, the government's answer was: “It is expected that the Program Manager referenced in . . . will be a corporate position, chargeable to G&A/overhead." Is this appropriate? Why should all of our other clients pay for the Program Manager who supports this project (through increased indirect rates)? What recourse or alternative do bidders have to respond to situations like this where the requirements seem to be at odds with generally understood direct / indirect charging principles?
  4. Help! I am a prime contractor working on a (competitively bid, edwosb set-aside) FFP Air Force construction project in NW Florida. I am processing a change order and the government contracting officer is indicating that I will not be able to add overhead and profit markups on my subcontractor’s markups. I AM permitted to account for my additional labor, materials, and supervision hours (with markups), and normal OH and profit markup to the subcontractor’s direct cost, but NO OH or profit markup on the portion of my total subcontractor’s price that result from his OH and profit markup. These costs are a part of my subcontractor’s price and are my “direct cost” (as I read FAR 43.203( b )(2)). Further, there is no place on the AF Form 3052 to segregate these costs as subcontractor costs would be added as a direct cost in column 9. The subcontractor effort will probably be less than 70% of the change, but this isn’t relevant since FAR clauses 52.215-22 or 52.215-23 “Limitations on Pass-Through Charges” are NOT included in the contract and, as I understand them, are intended for cost reimbursable type contracts anyway. The contract does include standard limitations on subcontracting that apply to the total value of the contract (labor, as this is a construction project), not to a specific change order. Can anyone give me a definitive source that I can reference for this Contracting Officer confirming that a prime contractor’s overhead (and profit) markup on subcontracted efforts (based on total subcontract price) is allowable? Of course, I am willing to negotiate in good faith if they return the same. If it helps, like most small business, CAS is not applicable and we do not have separate G&A and Overhead pools, only one comprehensive overhead rate. Thanks
  5. Help! I am a prime contractor working on a (competitively bid, edwosb set-aside) FFP Air Force construction project in NW Florida. I am processing a change order and the government contracting officer is indicating that I will not be able to add overhead and profit markups on my subcontractor’s markups. I AM permitted to account for my additional labor, materials, and supervision hours (with markups), and normal OH and profit markup to the subcontractor’s direct cost, but NO OH or profit markup on the portion of my total subcontractor’s price that result from his OH and profit markup. These costs are a part of my subcontractor’s price and are my “direct cost” (as I read FAR 43.203( b )(2)). Further, there is no place on the AF Form 3052 to segregate these costs as subcontractor costs would be added as a direct cost in column 9. The subcontractor effort will probably be less than 70% of the change, but this isn’t relevant since FAR clauses 52.215-22 or 52.215-23 “Limitations on Pass-Through Charges” are NOT included in the contract and, as I understand them, are intended for cost reimbursable type contracts anyway. The contract does include standard limitations on subcontracting that apply to the total value of the contract (labor, as this is a construction project), not to a specific change order. Can anyone give me a definitive source that I can reference for this Contracting Officer confirming that a prime contractor’s overhead (and profit) markup on subcontracted efforts (based on total subcontract price) is allowable? Of course, I am willing to negotiate in good faith if they return the same. If it helps, like most small business, CAS is not applicable and we do not have separate G&A and Overhead pools, only one comprehensive overhead rate. Thanks
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