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Are Cost Analyses Required for CPFF BOAs?


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#1 CeeGeeze

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Posted 16 August 2011 - 06:41 PM

I am a subcontracts administrator working for a contractor. I am interested in issuing CPFF Basic Ordering Agreements to subcontractors. I anticipate issuing task orders under these BOAs sometime within the next 5 years. At what point do I have to complete a cost analysis? Do I have to complete one before I can issue the BOA or can I wait until I have actual pricing from a subcontractor for a task order and complete the price analysis at that time?

By virtue of my contract type being CPFF, I am inclined to think a price analysis is not needed until actual tasking exists. I say this because it appear to be futile to analyze a list of possible rates when the BOA is issued if they are simply going to change prior to the issuance of tasking. The rates will undoubtedly change and I will have to reanalyze the cost at the task order level.

Thoughts?

#2 br549

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Posted 17 August 2011 - 12:24 PM

Your inclination seems right. But, apparently you are requesting some sort of cost/price info from prospective suppliers.Why? If the "BOA" you're issuing is a BOA as described in FAR 16.7, the cost/price is not set till an order is issued - you will have no firm cost/price info to analyze until an order is issued.

But prime contractors sometimes issue subcontract documents called BOAs that are not the same as BOAs described in FAR. So look at your situation. Is there any reason to set cost/price in the the BOA itself? Will the BOA become a contract at the time it is issued?

#3 CeeGeeze

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Posted 17 August 2011 - 02:16 PM

Your inclination seems right. But, apparently you are requesting some sort of cost/price info from prospective suppliers.Why?




I solicited pricing from my prospective suppliers to respond to a government RFP. Specifically, I solicited subcontractors for their CPFF rates so we (i.e. the prime contractor) could include those in our response to a government solicitation under which we are seeking a prime contract. This contract is currently pending award.

We anticipate being issued a CPFF ID/IQ contract (most likely a multiple award ID/IQ) from the government and then responding to individual competitive task solicitations under that prime over the next 5 years. The problem and the reason for the question in the original post is that I do not know exactly when we will issue tasking to the subcontractors. As such, I think their then current rates and even the labor categories that the subcontractors may propose at the task order level will differ from what was included in our response to the government solicitation for the prime contract. Thus I think the price analysis should happen then.

Note that I do have an analysis of the rates we bid as it is a requirement of the solicitation and our own policies and procedures that we provide one. IT just seems confusing to try and use that at the task order level when the pricing and labor categories have changed. That's why I'm a huge fan of the BOA idea. I don't know what labor categories or rates a supplier will bid until we get to the task order. It seems like a waste to do all of the analysis at the master agreement level when these components are unknown.

If the "BOA" you're issuing is a BOA as described in FAR 16.7, the cost/price is not set till an order is issued - you will have no firm cost/price info to analyze until an order is issued.

But prime contractors sometimes issue subcontract documents called BOAs that are not the same as BOAs described in FAR. So look at your situation. Is there any reason to set cost/price in the the BOA itself? Will the BOA become a contract at the time it is issued?


I do not think there is any reason to set the cost in the BOA itself. I'd prefer not to if it could be avoided. I'd rather establish and analyses costs once the actual piece of work is identified and I receive a task order proposal from a supplier for that piece of work.

#4 Vern Edwards

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Posted 18 August 2011 - 09:05 AM

If your question is: When must I perform a cost analysis?, see FAR 15.404-1(a).

I cannot think of how it makes sense to talk about performing a cost analysis before "issuing" a BOA. And anyone who ponders the possibility of setting the cost of cost-reimbursement work under a BOA itself either doesn't know what a BOA is or is talking about a different kind of BOA than described in FAR 16.703.




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