T&M as a subcontract

[ndean]

"d) Limitations. A time-and-materials contract may be used only if—

(1) The contracting officer prepares a determination and findings that no other contract type is suitable. The determination and finding shall be—

(2) The contract includes a ceiling price that the contractor exceeds at its own risk. The contracting officer shall document the contract file to justify the reasons for and amount of any subsequent change in the ceiling price. Also see 12.207( B ) for further limitations on use of Time-and-Materials or Labor Hour contracts for acquisition of commercial items.

· (i) Signed by the contracting officer prior to the execution of the base period or any option periods of the contracts; and

(ii) Approved by the head of the contracting activity prior to the execution of the base period when the base period plus any option periods exceeds three years;"

Three Questions:

Does this requirement trickle down to subcontractors? If so when we see that an offeror proposes a T&M subcontractor should we immediately request HCA approval?

At a very minimum, is the prime required to justify T&M contracts longer then a 3 year period of performance?

[Guest Vern Edwards]

No. It does not apply to subcontracts. There is no standard requirement that the prime justify the use of a T&M subcontract.

[HCuffage]

If you are dealing with a fixed price prime contract, it should not matter. However, if you are dealing with a cost reimbursable, time-and-materials, labor-hour, or letter prime contracts, then the government may [i'm going to amend my earlier post here - whether the government imposes consent to contracting depends on whether a contractor has an approved purchasing system - if not then it should be imposed, if yes, then the Government may still opt to impose consent for whatever subcontracts the CO determines impose risk for the Government] should have imposed consent to subcontracting on the prime IAW FAR 44.201-1. While the FAR limitations you cited are for government selection of a contract type at the prime level, the CO who has retained consent to contracting would likely apply the "no other contract type is suitable" standard in deciding whether to consent to such a contract type at the subcontract level depending on the specific circumstances. See the policy on not consenting to repetitive or unduly protracted use of time-and-materials subcontracts at FAR 44.203( B )(5). This may help you decide the answer to your questions. The smiley face in the FAR reference at 44.203 is supposed to be the letter b - have not figured out yet how to stop the system from converting these bs when I post. However, I see it is now showing up as a B.

But also note that consent requirements are not applicable to prime contracts for commercial items procured using FAR Part 12 procedures. You did not reveal information about the prime contract you are dealing with.