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DOECPA

FFP T&M Subs on CPFF Proposals

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I would like guidance on a Cost Plus Fixed Fee Proposal.  We requested the labor buildup for each labor category so we could evaluate cost realism.  A Prime offeror proposes subcontractor Fully Burdened Firm Fixed Price Ceiling Labor Rates for half the proposed effort.  We do not anticipate any privity of contract with the subcontractor(s).  Assuming that many smaller subcontractors have lower overhead this would allow the Prime to lower its proposed cost.  The likely cost of performance however is going to be higher since the effort may not get subcontracted out by the Prime.  It seems it would make more sense to evaluate at the Prime’s labor buildup amount which might result in an inflated fee pool.  Alternatively, if after award, the Prime gets permission to subcontract out part of the effort, it would probably result in a cost underrun and a better cost performance rating.

 

How are Firm Fixed Price LOE Subcontracts typically evaluated on Cost Plus Fixed Fee Efforts

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Doesn't the prime normally perform cost/price analysis and then submit that analysis as part of its own (certified) cost or pricing data?

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Yes,  The primes did perform their own Price Reasonableness determination and most of the subcontracts were competed and have negotiated rates.  The subcontractors have provided "other than cost and pricing" data directly to the Government and this was used to verify that the loaded rates were correctly calculated.  Each subcontractor has certified that these are firm fixed price rates that may not be exceeded.  We assume the Prime will use a tripwire to make sure it is not billed by the subcontractor for more than the ceiling amount.

 

 

 

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