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Cost/FFP Hybrid Contract


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I heard that a PCO was planning on issuing an RFP for a production item in which one CLIN is FFP for the labor portion of the production, and the materials/ODC will be on a separate CLIN as cost reimbursable without fee.

From the perspective of a Government employee, I foresee potential issues with this arrangement during execution. This plan appears to be counter to FAR 16.202 in which the contractor has full responsiblity for all costs and resulting profit or loss. I don't see how the Government receive the benefit of the requirement for completion of a product on the FFP basis if the contractor does not have complete control.

It seems to me that a single FPIF contract type for the price to make widget x is better than a FFP CLIN for widget x without material and a CR CLIN for material associated with widget x when material is essential to performance of producing widget x.

Is it possible that I am missing something? Thanks in advance for your suggestions.

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Guest Vern Edwards

A contract may be of any type of combination of types. See FAR 16.102(B). However, the arrangement that you describe does not make much sense to me. The laborers have to have materials to work with. What if the contractor cannot obtain the materials within the estimated cost? It is not obligated to continue to try to get them unless the government increases the estimated cost. What if the government cannot or will not do that? How can the contractor be held responsible for performance under the FFP portion of the deal? I don't see how that deal would promote the government's interests.

I don't think you're missing anything. An FPI(F) contract would make more sense.

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