rdedwards2 Posted November 23, 2011 Report Share Posted November 23, 2011 Hello, My consulting firm currently has several contracts with the Government that are structured in an odd way. They say that they are firm fixed price but the quantity ordered and unit is not for a single job (JO) but for a number of (usually 12) months. The nature of the work (software development with a lot of research) is such that no months are quite like the others. So, how can they issue a contract for 12 months at a fixed price per month? Does this constitute a FFP Level of Effort contract since we are essentially selling the Government 12 individual months of our effort or services? In addition, since the structure of the award is not for a single job, what happens if we fail to deliver on all aspects of the work? Thank you. Link to comment Share on other sites More sharing options...
styrene Posted November 23, 2011 Report Share Posted November 23, 2011 My guess is that the Government agency is under pressure to reduce T&M/Cost Reimbursement contracts so they took the total estimate for the year and divided by 12 and came up with a "fixed price" without quite understanding the various aspects of the work to be performed. Some agencies require climbing a mountain before they will allow a T&M/LH/CR contract to be awarded. I suggest you raise your concerns with the Contracting Officer and try to fix these apparent ambiguities. It could be that they are merely asking for your services and have no expectations of any completed work, but I doubt it. Link to comment Share on other sites More sharing options...
rdedwards2 Posted November 23, 2011 Author Report Share Posted November 23, 2011 Thanks Styrene for the reply. We have brought it up with the Contracting Officer, who insisted that the set up was to allow us to be able to invoice at the end of each month, as a progress payment. I was under the impression, according to FAR 52.216-7(a)(1) that we could already do this. I am reading that wrong? Link to comment Share on other sites More sharing options...
C Culham Posted November 23, 2011 Report Share Posted November 23, 2011 rd - Before this thread gets way out there I suggest some clarification. Reference is made to FAR 52.217-6. If this clause is in the contract then it is suggested that it is either a cost reimbursement or time and materials contract, yet FFP is also mentioned. So the question is what type of contract is in hand? Next, and to be blunt, was the contract forced on you at signing? It seems the issue you are now raising after the fact should have been understood and agreed to before your firm signed the contract! Or is your "contract" really a solicitation that is being responded to? In the end to help you sort out your concerns might take more than you can find in this forum as someone would need to look at your contract in total if you really now have a signed contract and understand the effort leading up to it before giving quality answers to your questions. If it is a solicitation the same is probably true too. Link to comment Share on other sites More sharing options...
Guest Vern Edwards Posted November 23, 2011 Report Share Posted November 23, 2011 As you have described it, the contract is not level-of-effort in the sense in which that arrangement is described in FAR Part 16. What appears to have happened is that they have hired you to perform services of a certain kind -- software development -- for a year. They expect you to provide some more or less constant "level" of service, but the service tasks are not standard month-to-month. These kinds of services are generally called "severable" as opposed to "entire" meaning that the service is continuing and recurring (more or less) in nature as opposed to progressing toward the completion of a single, specific job. If the contract calls for payment of a stipulated fixed amount in each month, then it is FFP, even though the services are severable. As for what happens if you fail to deliver on all aspects of the job, see the default clause, FAR 52.249-8. Link to comment Share on other sites More sharing options...
rdedwards2 Posted December 6, 2011 Author Report Share Posted December 6, 2011 As you have described it, the contract is not level-of-effort in the sense in which that arrangement is described in FAR Part 16.What appears to have happened is that they have hired you to perform services of a certain kind -- software development -- for a year. They expect you to provide some more or less constant "level" of service, but the service tasks are not standard month-to-month. These kinds of services are generally called "severable" as opposed to "entire" meaning that the service is continuing and recurring (more or less) in nature as opposed to progressing toward the completion of a single, specific job. If the contract calls for payment of a stipulated fixed amount in each month, then it is FFP, even though the services are severable. As for what happens if you fail to deliver on all aspects of the job, see the default clause, FAR 52.249-8. Thank you Mr. Edwards for your response. Is it still reasonable for there to be deliverables on the contract? This would make it seem like the services are entire, or am I completely misunderstanding that? Link to comment Share on other sites More sharing options...
Guest Vern Edwards Posted December 7, 2011 Report Share Posted December 7, 2011 You can have deliverables whether the service is entire or severable. Link to comment Share on other sites More sharing options...
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