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applies, and the amount of the Task Order exceeds the cost and pricing threshold per FAR 15.403-4(a)(1), then the current cost or pricing data would take precedent over any hourly rates established in the IDIQ.
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KMY
Member Since 26 Jan 2009Offline Last Active May 10 2013 10:23 AM
Posts I've Made
In Topic: ID/IQ Contracts vs. BOA's
10 May 2013 - 10:23 AM
Putting maximum ceiling hourly rates in the IDIQ makes sense to me, but simply stipulating hourly rates in the IDIQ may not. In the event that a Task Order is to be issued and none of the exceptions in 15.403-1( applies, and the amount of the Task Order exceeds the cost and pricing threshold per FAR 15.403-4(a)(1), then the current cost or pricing data would take precedent over any hourly rates established in the IDIQ.
applies, and the amount of the Task Order exceeds the cost and pricing threshold per FAR 15.403-4(a)(1), then the current cost or pricing data would take precedent over any hourly rates established in the IDIQ.
In Topic: Cost Type LOE Task Orders under IDIQ
16 November 2012 - 01:37 PM
Vern Edwards, on 31 August 2012 - 05:26 PM, said:
Even with the labor and fee rates you must request certified cost or pricing data if the order exceeds $700,000 and if none of the exceptions applies. That's because certified cost or pricing data are required before the award of a "negotiated contract," and a CPFF LOE task order is a negotiated contract. See FAR 2.101 for the definition of contract, FAR 15.000 for the definition of "negotiated contract," and FAR 15.403-4(a)(1)(i) for the requirement for certified cost or pricing data. The price for CPFF LOE task orders is not established at the time of award of the underlying IDIQ contract. See FAR 15.401 for the definition of "price." The price is established after the award of the underlying contract -- prior to the award of the task order, whether CPFF term or LOE. The establishment of hourly rates for cost estimating purposes does not constitute establishment of prices for orders.
I will add that it is stupid to establish "loaded" hourly labor rates and an hourly fixed fee rate in order to estimate costs and set fee for a CPFF contract of any kind, whether completion or LOE. Doing so is just a scheme to avoid the work of real task planning and real cost estimating. If you have to be told why it's a bad idea, then you don't understand CPFF contracts. Anyone who would do such a thing should not be allowed in the same building as a cost-reimbursement contract, much less be given responsibility for negotiating or managing one. It's that kind of stupidity, laziness, and incompetence that prompts criticism from IGs, the GAO, and other watchdogs, prompts Congress to pass more laws, and results in more regulation and limits on discretion.
The more I see and hear of what some people do in this business the more convinced I become that Incompetence is at crisis levels within the contracting workforce.
I will add that it is stupid to establish "loaded" hourly labor rates and an hourly fixed fee rate in order to estimate costs and set fee for a CPFF contract of any kind, whether completion or LOE. Doing so is just a scheme to avoid the work of real task planning and real cost estimating. If you have to be told why it's a bad idea, then you don't understand CPFF contracts. Anyone who would do such a thing should not be allowed in the same building as a cost-reimbursement contract, much less be given responsibility for negotiating or managing one. It's that kind of stupidity, laziness, and incompetence that prompts criticism from IGs, the GAO, and other watchdogs, prompts Congress to pass more laws, and results in more regulation and limits on discretion.
The more I see and hear of what some people do in this business the more convinced I become that Incompetence is at crisis levels within the contracting workforce.
I did come accross an answer on the DAU Ask a Professor FAQ that would seem to qualify the writer as someone who "should not be allowed in the same building as a cost-reimbursement contract"
Quote is below:
"Additionally, as indicated in FAR 2.101, the definition of a contract would include task orders issued under IDIQ contracts. However, in accordance with FAR 16.505(
(3), cost or pricing data would only be required for modifications to task orders if the IDIQ contract did not establish the pricing to be used for the task order. In a CPFF IDIQ contract requiring the delivery services via task orders, normally the contract will describe the types of services to be provided in a statement of work (SOW), specify the overall contract period of performance, specify the minimum level of effort and the maximum level of effort to be used over the course of the contract performance period in terms of labor hours, and specify the exact fully burdened hourly labor rates and hourly fixed fee rates to be applied to these hours to calculate the estimated cost and fixed fee of a given task order or modification thereto. [Note: the requester confirmed that this situation is the case with their IDIQ contract.] Prior to the award of the CPFF IDIQ contract, these contract-specified hourly labor and fixed fee rates used for pricing the delivery orders would have been determined by the Contracting Officer to be fair and reasonable for the maximum amount of hours required by the contract. Therefore, as long as the total hours used to calculate the cost of given task order, whether as originally issued or as subsequently modified, does not exceed the maximum amount of hours as set forth in the IDIQ contract, or if the overall IDIQ contract performance period is not being extended, then certified cost or pricing data would not be required because the pricing factors used to calculate the task order cost and fee have already been determined to be fair and reasonable. Consequently, in the scenario described by this question, TINA would not be triggered for individual task order modifications issued within the scope of the IDIQ contract (i.e., within the specified maximum hours and contract performance period) whether or not these task order modifications, taken individually or in the aggregate, exceeded $650K in value."Obviously, this answer was written before the cost or pricing data threshold was raised to $700k, but we now have two supposed experts in the field of contracting giving completely different guidance. It is no wonder the workforce is confused.
