Commercial Item With Time and Materials Component

[toofargone]

I have a firm fixed price indefinite quantity contract that I would like to solicit as a commercial item. There are a few time and materials components as well. Am I required to do the D&F under FAR 12.207((ii), even though the majority of the contract line items would not require this, or does the mere presence of any time and materials line items mandate it?

[napolik]

I have a firm fixed price indefinite quantity contract that I would like to solicit as a commercial item. There are a few time and materials components as well. Am I required to do the D&F under FAR 12.207((ii), even though the majority of the contract line items would not require this, or does the mere presence of any time and materials line items mandate it?

In reviewing the policy and procedures set forth in FAR 12.207 governing the preparation of a D&F, I conclude that you must do one even though a majority of contract line items are firm-fixed-price.

FAR 12.207((1)(ii)(A) establishes a requirement to prepare a D&F:

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12.207 -- Contract Type.

(a) Except as provided in paragraph ( of this section, agencies shall use firm-fixed-price contracts or fixed-price contracts with economic price adjustment for the acquisition of commercial items.

( (1) A time-and-materials contract or labor-hour contract (see Subpart 16.6) may be used for the acquisition of commercial services when?

(i) The service is acquired under a contract awarded using?

(A) Competitive procedures (e.g., the procedures in 6.102, the set-aside procedures in Subpart 19.5, or competition conducted in accordance with Part 13);

( The procedures for other than full and open competition in 6.3 provided the agency receives offers that satisfy the Government?s expressed requirement from two or more responsible offerors; or

( C ) The fair opportunity procedures in 16.505, if placing an order under a multiple award delivery-order contract; and

(ii) The contracting officer?

(A) Executes a determination and finding (D&F) for the contract, in accordance with paragraph ((2) of this section (but see paragraph ( c ) of this section for indefinite-delivery contracts), that no other contract type authorized by this subpart is suitable;

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While they do not address your question directly, other paragraphs in FAR 12.207 do imply that you must prepare one. Take a look at FAR 12.207((2)(iii):

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(iii) Establish that the requirement has been structured to maximize the use of firm-fixed-price or fixed-price with economic price adjustment contracts (e.g., by limiting the value or length of the time-and-material/labor-hour contract or order; establishing fixed prices for portions of the requirement) on future acquisitions for the same or similar requirements; ??.

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In my mind, this indicates a recognition that a single contract can contain both firm-fixed-price (FFP) and time-and-material (T&M) or labor-hour (LH) coverages.

See also FAR 12.207( c )(2) and (3):

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(2) When an indefinite-delivery contract is awarded with services priced on a time-and-materials or labor-hour basis, contracting officers shall, to the maximum extent practicable, also structure the contract to allow issuance of orders on a firm-fixed-price or fixed-price with economic price adjustment basis. For such contracts, the contracting officer shall execute the D&F required by paragraph ((2) of this section, for each order placed on a time-and-materials or labor-hour basis. Placement of orders shall be in accordance with Subpart 8.4 or 16.5, as applicable.

(3) If an indefinite-delivery contract only allows for the issuance of orders on a time-and-materials or labor-hour basis, the D&F required by paragraph ((2) of this section shall be executed to support the basic contract and shall also explain why providing for an alternative firm-fixed-price or fixed-price with economic price adjustment pricing structure is not practicable. The D&F for this contract shall be approved one level above the contracting officer. Placement of orders shall be in accordance with Subpart 16.5.

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These subparagraphs also anticipate contracts containing a mixture of FFP, T&M and LH coverages.

Since the scope of requirement to prepare a D&F set forth in FAR 12.207((1)(ii)(A) is not limited to a contract wholly T&M or LH and since FAR 12.207((2)(iii) and FAR 12.207( c )(2) and (3) anticipate the issuance of contracts with a mixture of FFP, T&M and LH coverages, I believe you must prepare the D&F.

[Guest Vern Edwards]

I have a firm fixed price indefinite quantity contract that I would like to solicit as a commercial item. There are a few time and materials components as well. Am I required to do the D&F under FAR 12.207((ii), even though the majority of the contract line items would not require this, or does the mere presence of any time and materials line items mandate it?

What did you mean when you said: "I have a... contract that I would like to solicit... ."? Solicit a contract? Why would you solicit a contract? What does that mean? Did you mean that you want to solicit proposals for a contract?

What did you mean by time-and-materials "components"? What are "components"? Did you mean line items?

And 12.207((ii) is not a legitimate FAR reference. Did you mean 12.207((1)(ii)(A)?

You are not too far gone. You can be saved.

[Guest carl r culham]

too - Do not forget your specific Agency/Department guidance that may be more definitive on the interpretations on FAR requirements being offered here.