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Converting T&M Task Orders to CPFF

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Situation: Multiple award IDIQs awarded as T&M contracts. All task orders that require recurring services are being converted to CPFF upon original POP end. RFPs have been prepared stating change to CPFF. Proposals coming in from IDIQ holders using unburdened rates but the subcontractors rates are loaded. KO has determined that the cost realism analysis will be done for the prime contractor's costs but not the sub's.

Question: Is this OK?

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Situation: Multiple award IDIQs awarded as T&M contracts. All task orders that require recurring services are being converted to CPFF upon original POP end. RFPs have been prepared stating change to CPFF. Proposals coming in from IDIQ holders using unburdened rates but the subcontractors rates are loaded. KO has determined that the cost realism analysis will be done for the prime contractor's costs but not the sub's.

Question: Is this OK?

In another thread, I asked this question:

Quote

I am attempting to convert contract types from T&M and FFP LOE to FFP or cost reimbursement. My client offers the opinion that a change of contract type is within the scope of the original competition. Thus, the shift in contract type can be accomplished without a new competition. After re-reading this post -http://www.wifcon.com/discussion/index.php?showtopic=65 - and the GAO decisions in DOR Biodefense Inc. and Emergent BioSolutions - B-296358.3 and B-296358.4, I believe that the shift in contract type is outside the scope of the competition, but I am not certain.

Does anyone have any case law to support or refute my belief?

Unquote

Two weeks later, after "consulting" with GAO, I posted this:

Quote

The GAO "informal" opinion is that a shift in contract type is outside the scope of the competition. Since GAO no longer issues "advance opinions" on protest issues, only appropriations issues, we will not receive a definitive opinion until GAO receives and decides a protest on this point.

Unquote

Pleaase see this thread: http://www.wifcon.com/discussion/index.php?showtopic=477.

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I went back and re-read the post. I actually weighed in on that thread. My question however, is, "Is it OK to allow the subcontractor's costs to go "unevaluated" while the Prime's are given a full scale costs analysis?"

I looked at FAR 44.202-2 "Considerations" to find that the Prime must perform "...adequate cost or price analysis or price comparisons and obtained accurate, complete, and current cost or pricing data, including any required certifications."

So I found the answer and will interpret that a "full-scale cost analysis" would include certification that this was performed. Thanks for responding.

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Wouldn't it matter if the subs were be billed out before as ODCs or under the Prime's T&M rates? Thinking that if it was billed out as an ODC before, was fully loaded and then had G&A or MH on it anyway and situation would be the same under the CPFF if the prime had a T&M subcontract set up.

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Situation: Multiple award IDIQs awarded as T&M contracts. All task orders that require recurring services are being converted to CPFF upon original POP end. RFPs have been prepared stating change to CPFF. Proposals coming in from IDIQ holders using unburdened rates but the subcontractors rates are loaded. KO has determined that the cost realism analysis will be done for the prime contractor's costs but not the sub's.

Question: Is this OK?

So the prime contract is being converted to CPFF, but that may not affect the subcontracts. What type of contracts are the subcontracts? If the subcontracts are T&M or some other fixed rate subcontract, what could be more realistic than the fixed rate that has been established in the subcontract between the prime and sub? In that case, I think that realism wouldn't be an issue, while reasonableness may be a different story, especially if you have a wide range of subcontract rates for each labor category.

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Guest Vern Edwards
Situation: Multiple award IDIQs awarded as T&M contracts. All task orders that require recurring services are being converted to CPFF upon original POP end. RFPs have been prepared stating change to CPFF. Proposals coming in from IDIQ holders using unburdened rates but the subcontractors rates are loaded. KO has determined that the cost realism analysis will be done for the prime contractor's costs but not the sub's.

Question: Is this OK?

There is no clear rule about this. But, when determining the realism of proposed estimated costs, if the subcontracts will be cost reimbursement, and if the subcontractors' costs will be a substantial portion of the total estimated cost, then I do not think it makes much sense to evaluate the realism of the prime's estimated costs and to ignore the realism of the subcontractors' estimated costs. If the subcontractors will be paid on a fixed-price or T&M basis, then cost realism is not an issue.

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