FFP Travel Costs

[Don Mansfield]

1 hour ago, Sam101 said:

which means the terms that are in the solicitation, and the terms in the solicitation can be that only transportation is an allowable cost.

Assuming that contract stated that allowability of costs would be determined in accordance with FAR subpart 31.2, wouldn't that be a FAR deviation?

[Sam101]

5 hours ago, Don Mansfield said:

Assuming that contract stated that allowability of costs would be determined in accordance with FAR subpart 31.2, wouldn't that be a FAR deviation?

I take this to mean that in accordance with FAR 31.205-46, a contract can never be FFP since it would be nearly impossible to estimate the true cost of Travel at time of submitting a proposal. And that there is no point of indicating in the contract that the Travel CLIN has a "not to exceed" limit (I always indicate that the Travel CLIN has a NTE limit, although I'm not sure if that is common practice), since if during performance the contractor incurs Travel costs beyond the "not to exceed" amount, the contractor can still bill for Travel costs incurred anyways. 

And if 31.205-46 is saying that Travel is required to be an allowable cost, I am now beginning to assume that a solicitation can never say that "Travel shall not be reimbursed at all", can it?

[ji20874]

Certainly, a contracting officer could declare in a solicitation that travel costs will not be reimbursed in a FFP contract.  If so, the prospective offerors have to bear the risk of estimating travel and making their own FFP pricing decisions.  If some prospective offerors don't like that risk and decide not to bid, that's fine.  If the result is a contract that s too expensive for the Government to afford, or no one bids, well, that might indicate that the Government did a poor job in market research.  If one offeror is closer and thus will have lower travel costs than another offeror, that is not an unfair advantage and the Government is not required to "equalize" that advantage -- no, it is fair for the Government to take full advantage of those facts.  The contracting officer can consider all of this during market research, and make a decision accordingly.  

[Sam101]

48 minutes ago, ji20874 said:

Certainly, a contracting officer could declare in a solicitation that travel costs will not be reimbursed in a FFP contract.

Right, and I'm thinking that based on this logic, that if a CO is wanting to be "nice" or accommodating to some degree in regards to Travel cost, that the CO can state in the solicitation which elements of Travel (such as airfare only) is an allowable cost to include in a FFP proposal (although I believe that even in a cost-reimbursement or T&M contract type RFP that a CO can do the same). Airfare reimbursement is better than nothing.

But this leads me to another question, since Travel must be requested by the contractor and approved by the COR/CO prior to the contractor incurring Travel costs, does that mean that the CO can obligate funds to the Travel CLIN at time of Travel approval? Or does the CO need to obligate funds to the Travel CLIN at time of contract award? Does it make a difference if the service contract is severable or not? Say, even if the actual contract work is a nonseverable service, can the CO "incrementally" fund the Travel CLIN as Travel is approved? Essentially treating the Travel CLIN like a severable line item?

 

[joel hoffman]

Another factor to consider is whether the amount and nature of the travel can be reasonably estimated before hand.

If it can, then the government could simply say that it will not be separately reimbursed. In that case bidders or proposers would be advised to include their estimated costs in the cost of the contract.

however if the amount of nature of contractor travel is not reasonably determinable, it would not be in the governments best interest to simply require contractors to Estimate amount to include in their bid or proposal.

That is when the government can include a separate line item for reimbursement of travel expenses. In my judgment, the government could include a plug line item amount and be specific about any restrictions Or limits on type of travel (e.g.,  No business or first class, best hotel rates, none or limits for per diem, etc.).

[joel hoffman]

One must be careful not to simply say “travel is not reimbursable“ in a firm fixed price contract with no separate contract line item for travel reimbursement. Stead of saying no reimbursement you need to say “travel will not be separately reimbursed”. The contractor would normally have the right to include estimated travel costs in its firm fixed price bid or proposal. 

[ji20874]

36 minutes ago, Sam101 said:

But this leads me to another question, since Travel must be requested by the contractor and approved by the COR/CO prior to the contractor incurring Travel costs, does that mean that the CO can obligate funds to the Travel CLIN at time of Travel approval? Or does the CO need to obligate funds to the Travel CLIN at time of contract award?

If I have a Government-directed Travel CLIN, I usually fund the CLIN up-front with an estimated amount.

[here_2_help]

5 hours ago, Sam101 said:

And if 31.205-46 is saying that Travel is required to be an allowable cost, I am now beginning to assume that a solicitation can never say that "Travel shall not be reimbursed at all", can it?

31.205-46 does NOT say that Travel is required to be an allowable costs. Instead, if the contract says that travel costs will be a reimbursable line item and that travel costs claimed for reimbursement must be allowable IAW FAR Subpart 31.2, then 31.205-46 controls what costs are allowable, and what costs are not allowable. It establishes the "ground rules" for reimbursable contractor travel costs.

Any FFP contract can require travel and it doesn't need to be a separate reimbursable CLIN. However, if you ask contractors to propose travel costs in their FFP bids then they are going to propose travel PLUS contingencies, because who knows? And if you are then going to require CO approval for travel, and you take too long to approve, that will be a delay/disruption REA. And if you are going to require travel in significantly in excess of the amount the contractor included in its proposal, that may be another downstream REA if the contractor believes you have changed the scope of work.

[Don Mansfield]

10 hours ago, Sam101 said:

I take this to mean that in accordance with FAR 31.205-46, a contract can never be FFP since it would be nearly impossible to estimate the true cost of Travel at time of submitting a proposal. And that there is no point of indicating in the contract that the Travel CLIN has a "not to exceed" limit (I always indicate that the Travel CLIN has a NTE limit, although I'm not sure if that is common practice), since if during performance the contractor incurs Travel costs beyond the "not to exceed" amount, the contractor can still bill for Travel costs incurred anyways. 

And if 31.205-46 is saying that Travel is required to be an allowable cost, I am now beginning to assume that a solicitation can never say that "Travel shall not be reimbursed at all", can it?

I asked a question. I did not state anything that should lead you to conclude that a contract should never be FFP. If you decide to answer, stop and think about the question before you start writing.

In reading your posts in this thread and others, I've noticed that you tend to take hard positions that you don't know to be true and leave it to others to correct you. Assuming that you're a beginner, let me suggest a different approach. Think through how you could be wrong before posting. If there's something that you don't understand, ask a question. Be more tentative about your conclusions. Practice intellectual humility. Don't state something is true unless you can prove it to be true.

Just some advice that you're free to ignore.

[Sam101]

2 hours ago, Don Mansfield said:

I asked a question. I did not state anything that should lead you to conclude that a contract should never be FFP. If you decide to answer, stop and think about the question before you start writing.

In reading your posts in this thread and others, I've noticed that you tend to take hard positions that you don't know to be true and leave it to others to correct you. Assuming that you're a beginner, let me suggest a different approach. Think through how you could be wrong before posting. If there's something that you don't understand, ask a question. Be more tentative about your conclusions. Practice intellectual humility. Don't state something is true unless you can prove it to be true.

Just some advice that you're free to ignore.

Thanks Don, fair enough, sorry about that... I knew that you were asking a question, my reply wasn't an answer to your question, it was just an observation to your question, maybe I was thinking out loud... In my post about the rule of two I stated that I may not be interpreting FAR 19.502-2(b) correctly after my statement, I knew that I had to be wrong because the GAO keeps applying the rule of two to services. 

I never seen a bid protest involving travel cost constraints in a solicitation, and I have looked.

[ji20874]

11 hours ago, here_2_help said:

Any FFP contract can require travel and it doesn't need to be a separate reimbursable CLIN. However, if you ask contractors to propose travel costs in their FFP bids then they are going to propose travel PLUS contingencies, because who knows? And if you are then going to require CO approval for travel, and you take too long to approve, that will be a delay/disruption REA. 

In a FFP contract where travel is not a separate reimbursable CLIN, there is no need for contracting officer approval of travel.

[here_2_help]

11 hours ago, ji20874 said:

In a FFP contract where travel is not a separate reimbursable CLIN, there is no need for contracting officer approval of travel.

I couldn't agree more. Tell it to your colleagues.

[Retreadfed]

12 hours ago, ji20874 said:

n a FFP contract where travel is not a separate reimbursable CLIN, there is no need for contracting officer approval of travel.

I totally agree with H2H.  When I worked with DCAS (this shows what an old mossback I am), we had as much trouble with PCOs who did not know what was in their contracts, as we did with contractors.  PCOs really need to make sure that the terms of the contract are consistent, particularly that what is in Section H is consistent with what is in Section I.  Further, it is amazing in contracts for commercial items how many PCOs include standard FAR clauses that are duplicative of paragraphs in 52.212-4 such as the termination provisions and payment provisions.