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Combination FP/CR Contract w/ODCs


Weno2

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Combination fixed-price/CPFF services procurment. The FP will have CLINs for some of the tasks in the statement of work task (SOW). There are some tasks in the SOW, that are cost-reimbursable. My question is regarding other direct costs (ODC). The previous K had a FP CLIN for ODCs, and a CR CLIN for ODCs. Is it better to address the ODCs in totality as a cost reimbursable (w/a not-to-exceed amount), or have a CLIN for FP CLIN for ODCs, and CR CLIN for ODC?

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Guest Vern Edwards

What do you mean by ODCs ("other direct costs")? What are they?

Work for tasks performed on a fixed-price basis and work performed on a cost-reimbursement basis should be clearly identified and mutually exclusive. Ordinarily, the fixed-price should encompass all obligations under the fixed-price line item. There should be no separate "other direct costs" associated with that line item. They should be included in the fixed price. (But see below). The estimated cost and fee of the cost-reimbursement line item should encompass all obligations under the cost-reimbursement line item, including any other direct costs. The contract should require the contractor to segregate its costs so that the government can determine what costs are allocated to what work.

If you intend to let the contractor charge the government on an actual cost basis for some costs incurred in the performance of the fixed-price work, such as travel, then you must either establish subline items under the fixed-price line item, one for fixed price and one for cost-reimbursement, or a separate cost-reimbursement line item for costs allocated to the fixed-price work. The contractor should not be permitted to combine costs incurred for the fixed-price work with costs incurred for the cost-reimbursement work.

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What do you mean by ODCs ("other direct costs")? What are they?

Work for tasks performed on a fixed-price basis and work performed on a cost-reimbursement basis should be clearly identified and mutually exclusive. Ordinarily, the fixed-price should encompass all obligations under the fixed-price line item. There should be no separate "other direct costs" associated with that line item. They should be included in the fixed price. (But see below). The estimated cost and fee of the cost-reimbursement line item should encompass all obligations under the cost-reimbursement line item, including any other direct costs. The contract should require the contractor to segregate its costs so that the government can determine what costs are allocated to what work.

If you intend to let the contractor charge the government on an actual cost basis for some costs incurred in the performance of the fixed-price work, such as travel, then you must either establish subline items under the fixed-price line item, one for fixed price and one for cost-reimbursement, or a separate cost-reimbursement line item for costs allocated to the fixed-price work. The contractor should not be permitted to combine costs incurred for the fixed-price work with costs incurred for the cost-reimbursement work.

Vern,

There will be costs for Travel under fixed-price and a cost-reimbursement items, and there will be costs for other direct costs under cost reimbursement. So I would establish a sub CLIN under fixed-price for Travel, and sub CLINs under cost-reimbursement for Travel and ODCs. For example, under fixed-price (CLIN 0001), the RFP would have CLIN 0001AA Fixed Price Tasks and CLIN 0001AB Travel. Under cost reimbursement (CLIN 0002), the solicitation would have CLIN 0002AA Cost Reimbursement Tasks, CLIN 0002AB Travel, and CLIN 0002AC Other Direct Costs. There will not be separate "other direct costs", b/c the costs will be included in the fixed-price.

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Guest Vern Edwards

Why do you want to bother with subclins under the cost-reimbursement item? Is the money for travel and ODC coming from other pots?

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Why do you want to bother with subclins under the cost-reimbursement item? Is the money for travel and ODC coming from other pots?

Same pot of money. When reading your earlier post, my interpretation was there would be CLINs for the CR effort. The solicitation has a Section B clause that addresses the not-to-exceed amount for travel and ODCs.

I'm used to having CLINs for other contract-types, so, I figured one would have the same (CLINs) for CR-type procurements. Guess that's when looking at examples of CR-type Ks (or combination w/CR as an element), I didn't see CLINs for CR. Trying to get a better grasp on the CR/CLIN issue. Thanks Vern.

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