CFO Posted February 17, 2022 Report Share Posted February 17, 2022 If a T&M rate was provided in the RFP stage in 2018 and the contract is finally starting in 2022, is a sub committed to that rate or the T&M rate can be re-evalucated upon getting the work? Are T&M contracts only considered variable cost contracts for ICE model purposes? Link to comment Share on other sites More sharing options...
ji20874 Posted February 17, 2022 Report Share Posted February 17, 2022 CFO, Think of the basics of contracts -- was there a valid offer and a valid acceptance? If a prospective subcontractor offered a hourly rate, and the other party (prime contractor) accepted the offer, then a contract is formed, right? Link to comment Share on other sites More sharing options...
Needforspeed Posted February 17, 2022 Report Share Posted February 17, 2022 On top of what ji said, you may consider 'what' you proposed or agreed-to with the prime. You do not mention how the subcontract is setup, or if there is a subcontract at all. If you were a teaming partner of the prime contractor, pre-award, and submitted a cost proposal during the RFP stage, what did your proposal say, and was there a teaming agreement? For example, were labor rates bid for a known period of performance that covers the timeframe in question (2022)? Were there any contingencies for how long your proposal was good for, or what the expectation would be should the prime contractor secure the award. Did your T&M rate proposal include an escalation of any kind? All these factors could help in determining your options. If you are only just now being asked to sign the subcontract, or commit to a T&M rate, you may have a basis to negotiate a new one, if circumstances have changed materially. It depends. If you already have a signed subcontract with fixed hourly rates, does the agreement have any language that would allow for renegotiation of rates (albeit unlikely?). If you have a signed subcontract, does it have fixed hourly rates for the time period in question? Link to comment Share on other sites More sharing options...
CFO Posted February 17, 2022 Author Report Share Posted February 17, 2022 we were teaming among many with no guarantee of work and there is no signed subcontract with fixed T&M rates stated. We submitted multiple rates and we were asked to reconfirm them a few times and I believe there was a good through date specified. They are now actually providing a few positions after a long Covid delay hindering the contract starting. Link to comment Share on other sites More sharing options...
Neil Roberts Posted February 18, 2022 Report Share Posted February 18, 2022 I believe that you and your customer should now negotiate a written contract with acceptable terms and conditions including price. Your reconfirming of price during the Pandemic may have created the impression that neither the Pandemic nor passage of time nor anything else had any significant affect on your prices. Link to comment Share on other sites More sharing options...
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