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We are a small company without a prosposl pricing mgr. at the moment. I would like to know the best approach for pricing/building IDIQ fully burdened labor rates as the prime (with multiple subs.)

In general, without knowing the specifics of the RFP requirements, is developing a "composite" rate using % of anticipated sub. utilization the best approach? Are there other approaches? Is there any specific written guidance you can direct us to so we go down the right path.

Thanks.

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We are a small company without a prosposl pricing mgr. at the moment. I would like to know the best approach for pricing/building IDIQ fully burdened labor rates as the prime (with multiple subs.)

In general, without knowing the specifics of the RFP requirements, is developing a "composite" rate using % of anticipated sub. utilization the best approach? Are there other approaches? Is there any specific written guidance you can direct us to so we go down the right path.

Thanks.

Hi wayforward,

1. You say you are a "small company" -- are you a "small business" as that term is used in FAR Part 19?

2. What type of task orders will be awarded under the ID/IQ contract? FFP, cost-plus, T&M, all of the above?

3. Have you identified all of your potential subcontractors & gotten proposals from them? What is the anticipated value of the subcontracts you will be awarding? Any of them expected to meet the FAR Part 15 requirement for submission of cost & pricing data?

My advice to you would depend on the answers to those (and perhaps other) questions. In brief, unless the RFP directs otherwise, I would focus on developing your own internal rates and cost buildup, while also creating accurate budgets for your proposed subcontractors based on anticipated costs plus allocation of indirect costs and profit. If you are going to have T&M task orders that are subject to the requirements of the T&M payment clause (52.232-7) then my suggested approach might change.

You also might want to keep in mind the recent DFARS changes regarding "excessive pass-through costs." If more than 70% of contract costs are going to be subcontracted, you're likely going to have to justify your company's added-value.

Hope this helps.

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I hate to start this. It is too easy to forget something.

Yes, you can propose a composite rate. I have accepted composite rates. Be certain that you are using reasonable numbers. If you are required to have a subcontracting plan, the composite rates should demonstrate that. Include overhead costs, G&A, other costs that are not billed directly. Be able to explain your method for developing the rates. Some may not like composite rates, and may reject them. Talk to your payroll accountant.

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Hi wayforward,

1. You say you are a "small company" -- are you a "small business" as that term is used in FAR Part 19?-- NO, WE ARE CLASSIFED AS LARGE

2. What type of task orders will be awarded under the ID/IQ contract? FFP, cost-plus, T&M, all of the above?---ALL OF THE ABOVE BUT THE AGENCY HAS A HISTORY OF FFP/LOE

3. Have you identified all of your potential subcontractors & gotten proposals from them? What is the anticipated value of the subcontracts you will be awarding? Any of them expected to meet the FAR Part 15 requirement for submission of cost & pricing data? WE HAVE IDENTIFIED THE SUBS./TEAM MEMBERS BUT WE HAVE THE RFP WILL NOT BE OUT FOR ANOTHER 60 DAYS

My advice to you would depend on the answers to those (and perhaps other) questions. In brief, unless the RFP directs otherwise, I would focus on developing your own internal rates and cost buildup, while also creating accurate budgets for your proposed subcontractors based on anticipated costs plus allocation of indirect costs and profit. If you are going to have T&M task orders that are subject to the requirements of the T&M payment clause (52.232-7) then my suggested approach might change.

You also might want to keep in mind the recent DFARS changes regarding "excessive pass-through costs." If more than 70% of contract costs are going to be subcontracted, you're likely going to have to justify your company's added-value.

Hope this helps.

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Hi there-thanks for guidance see answers in bold---

1. You say you are a "small company" -- are you a "small business" as that term is used in FAR Part 19?-- NO, WE ARE CLASSIFED AS LARGE

2. What type of task orders will be awarded under the ID/IQ contract? FFP, cost-plus, T&M, all of the above?---ALL OF THE ABOVE BUT THE AGENCY HAS A HISTORY OF FFP/LOE--THE BASE CONTRACT WILL HAVE LOADED RATES.

3. Have you identified all of your potential subcontractors & gotten proposals from them? What is the anticipated value of the subcontracts you will be awarding? Any of them expected to meet the FAR Part 15 requirement for submission of cost & pricing data? WE HAVE IDENTIFIED THE 10-12 SUBS./TEAM MEMBERS BUT THE RFP WILL NOT BE OUT FOR ANOTHER 60 DAYS +-

My advice to you would depend on the answers to those (and perhaps other) questions. In brief, unless the RFP directs otherwise, I would focus on developing your own internal rates and cost buildup, while also creating accurate budgets for your proposed subcontractors based on anticipated costs plus allocation of indirect costs and profit. If you are going to have T&M task orders that are subject to the requirements of the T&M payment clause (52.232-7) then my suggested approach might change. EXPECT MORE FFP/LOE ...WOULD PREFER MORE T&M but unlikely

You also might want to keep in mind the recent DFARS changes regarding "excessive pass-through costs." If more than 70% of contract costs are going to be subcontracted, you're likely going to have to justify your company's added-value. WE WOULD LIKELY SUB LESS THAN 50%

Hope this helps.

2. What type of task orders will be awarded under the ID/IQ contract? FFP, cost-plus, T&M, all of the above?

3. Have you identified all of your potential subcontractors & gotten proposals from them? What is the anticipated value of the subcontracts you will be awarding? Any of them expected to meet the FAR Part 15 requirement for submission of cost & pricing data?

My advice to you would depend on the answers to those (and perhaps other) questions. In brief, unless the RFP directs otherwise, I would focus on developing your own internal rates and cost buildup, while also creating accurate budgets for your proposed subcontractors based on anticipated costs plus allocation of indirect costs and profit. If you are going to have T&M task orders that are subject to the requirements of the T&M payment clause (52.232-7) then my suggested approach might change.

You also might want to keep in mind the recent DFARS changes regarding "excessive pass-through costs." If more than 70% of contract costs are going to be subcontracted, you're likely going to have to justify your company's added-value.

Hope this helps.

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Hi wayforward,

There is a lot you don't know yet. You don't know the pricing instructions, you don't know the contract type of the task orders, you don't know whether you will need to submit subcontractor cost & pricing data as part of your cost & pricing data.

But all things considered, you may be better off having each team member develop its own fully loaded labor rates (cost only, no profit) and then come up with the number of hours per team member (anticipated mix, sample task workload, percentage of effort per teaming agreement, whatever works).

Handling profit will be tricky. You will want to review the recent changes to the DOD T&M rules in DFARS if you are a DOD contractor; otherwise look at the recent FAR changes. You may be able to modify the subcontractor rates to add profit, but it is not a foregone conclusion.

Hope this helps.

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