Anticipated Gov-Directed Overtime on a FFP Contract--what are the options?

[joel hoffman]

Not missing anything. I'm trying to determine the best, least administrative way to handle the extra, "outside" hours (see my previous post for more detail). For the "unit-priced line items" for extra hours, I'm considering:

CLIN 006; As-Needed Labor Hours As Directed by The CO (Other Than Included in CLINS 001-005) CEILING: $20,000/YR

In accordance with contract clause xxxx.

Clause: Something to the affect that the Gov may direct work outside the normal duty hours and payment will be made at the wrap rates included in the contract for the specific labor type and quantity directed. The ceiling price would be addressed, with a provision that it would be changed from ceiling to actual at the end of the period, etc.

Ok. but this could be refined during the actual negotiations, if necessary to simplify the administration of it, correct?

By "wrap rate", what do you mean? I think of a wrap rate as a price to cover different situations. And you said earlier today in a reply to Vern Edwards that adding a provision for overtime later "would be subject to CICA". What do you mean ? You aren't supposed to be competing A-E services using price as a factor.

I honestly don't see this as a big deal if you are negotiating the price after selection of the firm. You said I wasn't missing anything, so I assume that this is a contract for A-E services, including inspection during construction. My gut feel from this whole thread is that you are trying to price the contract in a competition, rather than mutually price it as required by law for A-E services.

[schickson]

Ok. but this could be refined during the actual negotiations, if necessary to simplify the administration of it, correct?

By "wrap rate", what do you mean? I think of a wrap rate as a price to cover different situations. And you said earlier today in a reply to Vern Edwards that adding a provision for overtime later "would be subject to CICA". What do you mean ? You aren't supposed to be competing A-E services using price as a factor.

I honestly don't see this as a big deal if you are negotiating the price after selection of the firm. You said I wasn't missing anything, so I assume that this is a contract for A-E services, including inspection during construction. My gut feel from this whole thread is that you are trying to price the contract in a competition, rather than mutually price it as required by law for A-E services.

You're right, this really isn't that big of a deal--I was hoping for a quick sanity check on my approach in contract formation. The original question really had little if anything to do with competition, but more with suggestions on how to set up the contract for the easiest administration over the life of the contract. It is A/E and I will be negotiating with only one contractor (hopefully).

My customer has since confirmed that the extra hours needed from time to time are in fact not "overtime" hours, but rather additional labor for unexpected situations. Unfortunately, these unexpected situations range significantly year-to-year, so I'm leaning away from having the contractor propose on an estimated amount of extra labor hours plus/minus a certain percent (with variation in quantity provisions) and leaning toward the separate L/H CLIN as originally proposed.

Thanks again to all.

[Jacques]

For those of you keeping score at home, just to provide some context, the relevant FAR references for overtime (on cost-reimbursement and T&M contracts) include: FAR 22.103, 52.222-2 (cost-reimbursement), & 52.232-7(a)(8) (T&M).

[joel hoffman]

You're right, this really isn't that big of a deal--I was hoping for a quick sanity check on my approach in contract formation. The original question really had little if anything to do with competition, but more with suggestions on how to set up the contract for the easiest administration over the life of the contract. It is A/E and I will be negotiating with only one contractor (hopefully).

My customer has since confirmed that the extra hours needed from time to time are in fact not "overtime" hours, but rather additional labor for unexpected situations. Unfortunately, these unexpected situations range significantly year-to-year, so I'm leaning away from having the contractor propose on an estimated amount of extra labor hours plus/minus a certain percent (with variation in quantity provisions) and leaning toward the separate L/H CLIN as originally proposed.

Thanks again to all.

My suggestion is to find out how they would price "after hours" time for inspectors in a fact finding seesion with the most qualified firm. They might only pay overtime after 8 hours per day, depending upon what type of employee you are needing. Discuss the situation then set up the CLIN's to price.

[Guest Vern Edwards]

I was hoping for a quick sanity check on my approach in contract formation. The original question really had little if anything to do with competition, but more with suggestions on how to set up the contract for the easiest administration over the life of the contract..

My customer has since confirmed that the extra hours needed from time to time are in fact not "overtime" hours, but rather additional labor for unexpected situations. Unfortunately, these unexpected situations range significantly year-to-year, so I'm leaning away from having the contractor propose on an estimated amount of extra labor hours plus/minus a certain percent (with variation in quantity provisions) and leaning toward the separate L/H CLIN as originally proposed.

Thanks again to all.

Schickson:

You wrote to me privately and asked me to participate in this, but the back and forth that has developed here is annoying as heck. I see this as a very simple problem, an elementary one, really, that you have made needlessly complicated by being vague and trying to conduct some kind of dialogue with a bunch of people, which is taking us all over the place. It is hard to propose "viable options," because you haven't provided a clear description of the nature and context of the requirement. All you have said is "inspection services."

When you want input on acquisition strategy, either describe the requirement and its circumstances clearly and definitely or seek advice elsewhere. We are not sitting in an office kicking ideas around. Most of us participate intermittently, as our day permits, and it's a pain to have to keep coming back to you asking for more info, or to propose something, only to have you say that won't work because of some info that you didn't give us previously, or to find that the thread has taken off into some weird direction unrelated to the original question, like the Brooks Act.

[joel hoffman]

My suggestion is to find out how they would price "after hours" time for inspectors in a fact finding seesion with the most qualified firm. They might only pay overtime after 8 hours per day, depending upon what type of employee you are needing. Discuss the situation then set up the CLIN's to price.

Forgot to mention this, yesterday in responding to your post #27. You don't necessarily have to deal with the VEQ clause. If both parties agree during negotiations that there wont be any variation in the unit cost for an as needed OT CLIN, just state that the overtime CLIN's aren't subject to the VEQ clause. The personnel still fill out time cards and the payroll program calculates the pay and pays them for time worked. I don't see any special admin costs associated with keeping track of OT for engineers or inspectors. It was no big deal in the company I worked for.

[Guest Vern Edwards]

VEQ clause? Where did that come from? How does that apply to the situation as we know it from schickson's posts?

[joel hoffman]

VEQ clause? Where did that come from? How does that apply to the situation as we know it from schickson's posts?

QUOTE (schickson @ Oct 29 2010, 12:05 PM) *

'You're right, this really isn't that big of a deal--I was hoping for a quick sanity check on my approach in contract formation. The original question really had little if anything to do with competition, but more with suggestions on how to set up the contract for the easiest administration over the life of the contract. It is A/E and I will be negotiating with only one contractor (hopefully).

My customer has since confirmed that the extra hours needed from time to time are in fact not "overtime" hours, but rather additional labor for unexpected situations. Unfortunately, these unexpected situations range significantly year-to-year, so I'm leaning away from having the contractor propose on an estimated amount of extra labor hours plus/minus a certain percent (with variation in quantity provisions) and leaning toward the separate L/H CLIN as originally proposed."

[Guest Vern Edwards]

Joel:

I know of a variation in quantity clause for supply contracts, FAR 52.211-17, and a variation in estimated quantity clause for construction contracts, FAR 52.211-18, but I do know of a variation in estimated quantity clause for service contracts. Please provide a reference.

[joel hoffman]

Joel:

I know of a variation in quantity clause for supply contracts, FAR 52.211-17, and a variation in estimated quantity clause for construction contracts, FAR 52.211-18, but I do know of a variation in estimated quantity clause for service contracts. Please provide a reference.

Vern - whatever. My point to schickson is not to get concerned about the ramifications of an overtime or extended hour unit-priced line item, especially before talking to the firm that you are going to negotiate with. This whole thread has taken a molehill and turned it into a mountain. Discussion about wrap rates, greedy contractors, risk allocation, variations in the estimated quantity - geez.

If you need a line item for extra hours, TALK to the A-E firm to find out the best way to handle it before you ask for the proposal for gosh sakes.

[formerfed]

My suggestion is to find out how they would price "after hours" time for inspectors in a fact finding seesion with the most qualified firm. They might only pay overtime after 8 hours per day, depending upon what type of employee you are needing. Discuss the situation then set up the CLIN's to price.

Joel,

You know more about this subject than I do but your advice at this point seems right on. I think schickson should just take your suggestion at this point and proceed on his own without further complications.

[schickson]

Schickson:

When you want input on acquisition strategy, either describe the requirement and its circumstances clearly and definitely or seek advice elsewhere. We are not sitting in an office kicking ideas around. Most of us participate intermittently, as our day permits, and it's a pain to have to keep coming back to you asking for more info, or to propose something, only to have you say that won't work because of some info that you didn't give us previously, or to find that the thread has taken off into some weird direction unrelated to the original question, like the Brooks Act.

Thanks to all of you for your imput.