Jump to content
The Wifcon Forums and Blogs

marcfgov

Does CPFF always flow down to the sub? (not as silly as it sounds, I think)

Recommended Posts

Oh Masters of the Government Contracting Universe,

Me again!

I am with a new company, we do not have CPFF contracts (we do have FFP and T&M from GSA FABS/MOBIS schedules). Are we able to team with an Prime on a CPFF contract? Does CPFF always flow down to the sub? Just checking as I see opps that we can’t prime, but we could provide the services as a sub.

I believe I can bid FFP CLINS and T&M CLINS using my GSA pricing, but as we grow, I am worried about flowdown clauses.

My understanding is that whether we (as a sub) are exempt from CAS or is based on our specific situation, not the Prime’s.

CAS does have mandatory flowdowns provisions, but in order to claim CAS exemption, all we have to do is show that we qualify, on our own, for a valid exemption.

Saying that, we claiming exempt from CAS at this time. The GSA schedule pricing was not Cost Base, but Commerciality Based (which was approved years ago and we are not moving towards cost based).

Thoughts?

Share this post


Link to post
Share on other sites

Just because your prime contract is CPFF, doesn't mean your subcontracts have to be CPFF as well. It depends on what the requirement of your subcontract procurement is.

Share this post


Link to post
Share on other sites

pmh is correct but please consider that your prime may perform cost/price analysis before awarding you a subcontract (of any type). In proposing work for a cost-type prime, you will still have to comply with the FAR Part 31 cost principles if that is the case. You will still have to have indirect cost pools and allocation bases and indirect cost rates.

Sure you will be exempt from CAS, but many of the Part 31 cost principles mandate compliance with individual Standards as a condition of allowability.

It appears your new company would like additional revenue without changing its practices and its current approach to contracting.

I bet that won't work out as well as they think it will.

Hope this helps

Share this post


Link to post
Share on other sites

Thank you for your reply! Very Helpful in framing my thoughts.

As for the "withoug change it practices and approach" that is what I am here to do. Using Deltek, setting up pools, policies and procedures, etc. This question is just the band-aide as we are moving forward toward bigger and better things!

As GSA has moved more to the cost based pricing, this company has been "forced" to move away from commerciality and focus more on a bottoms up approach.

Again, thank you all for your help and support. This is be best resource!

Share this post


Link to post
Share on other sites

marfgov, look at FAR 31.204©. That section makes payments under a cost reimbursement contract to a subcontractor holding an FFP or FP(EPA) subcontract allowable if cost analysis was conducted regarding the subcontract and the subcontract was negotiated in accordance with FAR 31.102. Notice that this limitation only applies if the prime conducted cost analysis as described in FAR 31.102. If your company is providing a commercial item or the subcontract was awarded on a competitive basis, cost analysis should not be performed in most cases. In that case, reimbursement of the prime would not depend upon costs you incur being allowable. As a consequence, you would not necessarily need to change your accounting system.

Share this post


Link to post
Share on other sites

Thank you. That also makes sense. We have not had to provide any type of cost analysis at this point in the company's history. We only had to prove commerciality for the original GSA pricing (many years ago). The remainder of the awards have been competitive FFP.

We are looking to expand and that is the push to move towards a compliant system and all that accompany it.

Share this post


Link to post
Share on other sites
Guest
This topic is now closed to further replies.

×