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Showing results for tags 'profit/fee'.
Hi all, I'm being asked to determine whether or not a proposed profit of 10% is fair and reasonable on a sole source T&M contract we're planning on awarding. We haven't done this type of work before and I don't really have anything to base our decision off. I've read through FAR 15.404-4, The Time-and-Materials Contract: The Time Has Come for A Long, Hard Look, the DoD's weighted guidelines, and GSA's structured profit/fee approach and it doesn't seem like 10% is even close to something that should be fair and reasonable considering the contract type and risk involved, though I understand
Here is a scenario. A contracting activity releases a competitive solicitation for a requirements / firm-fixed price, materials reimbursement type contract. The solicitation also includes a performance incentive in which the winning contractor has the ability to receive a quarterly fixed amount if the contractor meets specific performance goals in that quarter. The contractors proceed to bid on the effort with either no or negative profit/fee. This is based on the intent that they will pass the performance goals and receive the performance incentive. In the follow-on competitive solicitat