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Mayonayze

Cost Plus Fixed Fee NTE Labor Rates?

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Trying to find the section of the FAR that deals with these kinds of contract arrangements. under what circumstances are relief from the NTE labor rate granted? if the basis of pricing provides for a $50k salary based on statistical compensation analysis and salary surveys, but the market for this particular LCAT is highly volatile and by the time a task-order for this labor is released, the mid-point of the compa-ratio range has moved up and we can't find these guys for less than $55k, then are we stuck holding $5k of that salary in unallowable? doesn't seem to be in the true nature of a CPFF contract...

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There is a basic principle of cost-reimbursement contracts you are not considering -- in a cost-reimbursement contract, the parties can agree on the treatment of certain costs before incurrence of the costs.

If an offeror submits a proposal promising a cap or NTE on certain costs, and wins a contract based in part on that NTE, then that NTE is enforceable for the life of the contract. It must be this way; otherwise, the original promise was not a promise.

If you promised a NTE labor rate, and that promise is captured in your contract, then yes, you are "stuck holding $5k of that salary."

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Well, my advice is to honor the promise and agreement memorialized in the contract.

When I award a cost-reimbursement contract and the contractor promises to cap certain rates, I expect the contractor to honor its promise.

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Aren't you a businessperson? You made a deal and now you want out of it. If you can't figure out how to do that on your own, then nothing any of us could say is going to help you.

This isn't the HBA. You are on your own. Figure something out. Or don't.

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