FFP Competitive award which contains a few CPFF CLINs

[ContractPriceAnalyst]

Background: There is a potential RFP going out for a non-commercial source selection in which a majority of the CLINs will be FFP. There are some option CLINs for which the program office believes that the "scope of work is not well enough defined for the contractor to bid". There is relunctance to either make it a reserved CLIN or to use T&M so there is a push to make it CPFF. There is reluctance to include an evaluation of a Government Estimate of Probable Cost in Section M of the RFP for those CPFF CLINs; the program office does not believe that the CPFF CLINs are going to be relevant discriminators.

Issue: Someone had suggested the possiblity of including a plug number in the RFP for each CPFF CLIN. The target cost would be the program office estimate with a fixed fee dollar amount (some amount that would be less than 10% of the estimated cost due to statuatory requirements). I like the simplicity of this approach as it would save the offerors the B&P costs associated with trying to provide support for a bid for a requirement that is not well defined, however, i am concerned that this approach does not allow for consideration of each individual offeror's unique approach and technical solution. Also, I don't quite comprehend that the scope of work can be well enough defined for a program office estimate, yet, not enough for potential offerors' to bid.

Question: Has anyone seen an RFP with a plug number for a CPFF CLIN? Does anyone have any other thoughts or legal/contracting considerations that I should bring forth to the team as we discuss and further define the acqusition strategy?

Thanks for your time!

[Cajuncharlie]

Close. I've seen a couple that were mainly FFP with cost-only pass-through plug-numbered CLINs without any indirects, one RFP that contemplated only minor ODCs and one that contemplated some ODC equipment purchases of significant monetary value. Oh, and one cost element that should have been a cost reimbursement CLIN with a plug number, but wasn't, apparently because FFP was politically necessary.

If the undefined effort being considered for a cost type CLIN is minor in terms of labor, no problem. If, however, it involves significant effort. it will need careful thought. Can you talk to your estimator to gain an understanding of his basis of estimate?

[Don Mansfield]

How would you be compliant with FAR 17.207(f) before exercising the option?

[ContractPriceAnalyst]

In response to Mr. Mansfield's comment: Under the plug situation, Section M would state that the CPFF CLINs would be evaluated at the specified $xxx amount. Essentially, we are not evaluating those CLINs but in order to satisfy requirements of FAR 17.207(f), Section M would state that we are evaluating them eventhough we are evaluating them at our number. It seems somewhat like circular logic, but I believe that was the idea at least.

Thanks again for the input!

[Smurphy430]

We here have used plug numbers extensively both for T&M, CR, and CPFF. The problem when using the plug number is that you remove the numbers from the competition, you are essentially leveling the field and making the numbers a none-issue as a discriminator for evaluation. Another issue we have seen when giving plug numbers the contractor has the ability to "buy-in" to the contract, and then coming back to the Government for overruns that it cannot be held against the contractor because they did not originally bid the number. Another issue in CPFF if the CAS rules may be invoked when you do a Cost type contract. an overrun would negate the contractor's right to the fee, but the overrun would be the Government's fault because the Government gave the number. I suggest doing a T&M CLIN before a cost reimbursable CLIN if you have to do a plug number, and leave the fee out of it. Moreover, when you do a cost CLIN you get into FPRA/FPRR/Provisional Pricing, remember this is true for any part of the contract is cost. If you have a FFP contract with small parts being cost, you do not get away from some of the requirements implicit in a full cost type contract.