Hello,

I am managing a 10-year contract with firm-fixed price and labor hour CLINS. 8 of the 10 CLINS are FFP, while the remaining CLINS are labor hour. I understand that a labor hour contract requires a contractor to perform work rather than deliver a level of effort. If the ceiling needs to be raised to cover the addition of work that is outside the scope of the contract, the contracting officials must follow certain procedures, such as a sole source justification and D&F. However, the contractor's services performed against the FFP CLINS exceeded the contract price. Because the total amount obligated ( for FFP CLINS) has already exceeded the contract price for the current option period, I am hesitant to proceed with obligating additional funds against the FFP CLINS. What advice would you give to a rookie Contract Specialist? I'd appreciate any feedback you can give me.

Are the eight FFP CLINs unit priced with estimated quantities ? Are any of the eight FFP items priced as lump sum?

I don’t understand how the services for those FFP items exceed the contract price, unless they are unit priced, with estimated quantities. If so, there should language in the contract that would limit payment for unit priced line items to whatever funding limits are in the contract. There should also be measurement and payment instructions for the FFP unit-priced line items. 

I appreciate your response. The following is an example of how the FFP CLINS are listed:

CLIN        Description              QTY      Funded Amt      Unit Price      Extended Price

0008       Toll Free Service       1 AJ      $XXXX               $XXXX          $XXXX

The only language pertaining to unit pricing that appears in the task order (my mistake, this is a task order, not a contract) award is as follows: "Travel and per diem shall be included in the fully loaded firm-fixed unit prices of the task order." The task order contains no language that limits payment for unit price line items, nor does it contain language relating to measurement and payment instructions. I'm assuming the intention was to structure this task order as a fixed unit price with measurement and payment instructions, as you indicated.

What would be the best approach to address this?

I’m sorry but I plead ignorance about what a 1 AJ means or how the contractor can exceed a “1 AJ” for Toll Free Service…  Can you clarify what AJ is please? 

 

Joel,

I am still familiarizing myself with this task order award. The former C/O informed me that AJ stands for adjustable.

@1102_InquiringMind

On 7/6/2022 at 2:39 PM, 1102_InquiringMind said:

I am managing a 10-year contract with firm-fixed price and labor hour CLINS. 8 of the 10 CLINS are FFP, while the remaining CLINS are labor hour. I understand that a labor hour contract requires a contractor to perform work rather than deliver a level of effort. If the ceiling needs to be raised to cover the addition of work that is outside the scope of the contract, the contracting officials must follow certain procedures, such as a sole source justification and D&F. However, the contractor's services performed against the FFP CLINS exceeded the contract price. Because the total amount obligated ( for FFP CLINS) has already exceeded the contract price for the current option period, I am hesitant to proceed with obligating additional funds against the FFP CLINS.

I find your descriptions of the task order and of your issue confusing. You refer to FFP and labor hour pricing in such as way as to make it hard to understand the nature of your problem. What if anything do the FFP items have to do with the labor hour items? Is your problem connected to the FFP portion of the contract, the labor hour portion of the contract, or both?

If you cannot do a better job of sorting out the issues and describing the problem, then what you are going to get here is a series of inquiries from people instead of a helpful response.

On 7/6/2022 at 2:39 PM, 1102_InquiringMind said:

What advice would you give to a rookie Contract Specialist?

Communicate clearly, fact by fact, sentence by sentence.

@1102_InquiringMind can you provide more details on the order and pricing?  Just from your description of CLIN 0008, I suspect whoever drafted the order doesn’t understand the arrangement.  For example toll free service is priced based on time of incoming calls.  So the only thing you have is a rate schedule of unit prices per minute or whatever multiplied by an estimate of time required for an overall CLIN not-to-exceed amount. If the estimate of needed incoming toll free call time is less than demand, the ceiling is prematurely reached. 

2 hours ago, 1102_InquiringMind said:

Joel,

I am still familiarizing myself with this task order award. The former C/O informed me that AJ stands for adjustable.

Okay, before asking for answers here, you first need to read the contract and understand what you are acquiring, how it was priced and how it is measured and paid for.

I don’t know how an adjustable item for toll free service would be FFP unless there is a rate schedule somewhere in the contract to calculate  payment for billing purposes. formerfed described such a scenario.  .

Assuming that be the case, I think that your first option would be the correct approach. 

 

My post was intended to address the FFP CLINS rather than the labor hour CLINS. I am managing a task order issued under GSA's Telecommunications and Network Services Contract and am trying to understand how funds obligated against each FFP CLIN can exceed the price specified in the Price Schedule. CLIN 0001, for example, is priced at $4,500.00 per unit for Cable and Wiring. The total amount obligated for this CLIN is $10,500.00. CLIN 0002 is priced at $120,000.00 per unit for Private Line Services. The total amount obligated for this CLIN is $350,000.00. CLIN 0008 is priced at $21,875,907.55 per unit for Toll Free Services. The total amount obligated for this CLIN is $32,457,899.20.

I read the task order and did not see a rate schedule of unit prices to calculate payment for billing purposes. Perhaps I'm missing a document that contains this information. I'm not sure what additional information I can provide to help you understand my post better. I apologize if it’s not sufficient details.

4 hours ago, 1102_InquiringMind said:

My post was intended to address the FFP CLINS rather than the labor hour CLINS. I am managing a task order issued under GSA's Telecommunications and Network Services Contract and am trying to understand how funds obligated against each FFP CLIN can exceed the price specified in the Price Schedule.

Have you also read the GSA contract that the task order is issued under?  Do you have a GSA point of contact? That’s where I recommend that you seek answers.

Is the below  contract the applicable GSA, Enterprise Infrastructure Solutions (EIS) Contract?

Subject : Telecommunications and Network Service Contract

https://www.gsa.gov/technology/technology-purchasing-programs/telecommunications-and-network-services/enterprise-infrastructure-solutions/enterprise-infrastructure-solutions-contract-basics

7 hours ago, 1102_InquiringMind said:

I am managing a task order issued under GSA's Telecommunications and Network Services Contract and am trying to understand how funds obligated against each FFP CLIN can exceed the price specified in the Price Schedule.

 

7 hours ago, 1102_InquiringMind said:

I'm not sure what additional information I can provide to help you understand my post better. I apologize if it’s not sufficient details.

@1102_InquiringMindThink! Just for a moment.

I warned you about what is happening in this thread. So now let me be frank with you.

Is it your impression that there is a standard explanation for how funds obligated under a task order FFP line item can exceed the price? If so, you are misinformed. There are any number of possible answers. Yet you want someone here to explain an occurrence under a task order that none of us have seen, with a file that none of us have seen, and that was issued under a GSA schedule contract that few if any of us have seen and that you seem to know little about and have not clearly described.

In order to explain an occurrence under a contract a person needs information about the contract and the circumstances of the occurrence. In this case, you don't have enough information to enable anyone to even speculate intelligently.

What bothers me about this is that you don't seem to get it what's happening here.

Some of you who come here looking for answers don't know how to ask questions. Yet, for an 1102, the ability to ask clear and properly contextualized, i.e., intelligent questions is the primal skill. Almost all contracting work entails asking and answering questions. Tasks like requirements analysis, cost analysis, and claim settlement pretty much consist of looking at information, developing questions, asking them, and assessing the answers.

Think about that, 1102_inquiring mind. I know you said you are a "rookie." Well, welcome to a tough business. I've been in it 48 years, and it's still a challenge.

Now go find someone in your office who might be able to answer your question. Or, better yet, read the order and the contract and go through the task order file, item by item, and see if you can find an answer for yourself. That would be worth doing, unlike what you're doing here.

@1102_InquiringMind I completely agree.  I’m assuming the contract you’re referred to is either EIS, Networx, or WITS.  Regardless of which one they are exceedingly complex and the pricing is among the most complicated you’ll ever see.  The only way you’ll understand this is through lots of research and questioning.  Start by looking at all the available information.  There are lots of links to various pricing tools.  Read the contract.  Find of a copy of the contractors proposal in your agency file.  Then talk with GSA - somewhere there worked with your agency in soliciting the proposal from the contractor, evaluated in, and probably held discussions with the contractor.

The short answer to your question on how do obligated funds exceed the price schedule is that is because whoever at your agency that obligated the funds (shouldn’t that be somebody in your office) saw a need that actual forecasted usage will be more than the estimate.  This is a “pay by the drink” contract where each time you gulp, you get charged. 

I am grateful for all of the positive feedback. I will definitely consider your feedback and conduct additional research, contact GSA's point of contact, and ask questions to better understand the structure of this task order. Enjoy your weekend, gentlemen.

19 hours ago, joel hoffman said:

I’m sorry but I plead ignorance about what a 1 AJ means or how the contractor can exceed a “1 AJ” for Toll Free Service…  Can you clarify what AJ is please? 

 

Well heck I think that the OP is off in the right direction but just to add to the confusion that this thread created here you go found here -https://www.acq.osd.mil/dpap/policy/policyvault/USA003581-16-DPAP.pdf

AJ = Cop = a cylindrical or conical mass of thread, yarn, or roving wound on a quill or tube

Someone made up AJ?    AJ is a reportable unit of measure as well in the FAS Sale Reporting System (SRS) of GSA.

🤷‍♂️🤷‍♂️🤷‍♂️

So many questions here come from contracting folks who inherit messes and want assistance in finding their way out! Who holds people accountable for creating those messes in the first place? Nobody, as far as I can tell.

20 hours ago, here_2_help said:

So many questions here come from contracting folks who inherit messes and want assistance in finding their way out! Who holds people accountable for creating those messes in the first place? Nobody, as far as I can tell.

We don't know that 1102_InquiringMind has a mess. What we do know is that they are "managing" a task order that they don't seem to understand well enough to make effective inquiries about. But we must recognize that the OP has said they are a rookie. So we must cut them some slack.

I hope that all 1102s who read this take seriously the notion that skill in asking questions is as important in their work, indeed, as skill in answering them. Indeed, more important.

Almost all learning and every decision a CO must make must be based on information obtained by asking good questions. And every good question is based on a specific context (state of affairs), clear and appropriate language, and a sound strategy of inquiry.

The ability to ask good questions is the sine qua non of professional contracting, and based on what we have seen at Wifcon Forum, it is and has long been in short supply among the workforce.