I know fee is not allowed on ODCs for T&M contracts, but can contractors negotiate fee/profit or some sort of markup on ODC special item numbers like ANCILLARY? Are there certain exceptions like if they are selling an off the shelf product?

@CuriousContractor_22 Some questions.   Are you asking about T&M contracts in general or just task orders under GSA Schedules and other types IDIQ contracts?  You mentioned special item number and that usually refers to GSA Schedule.  What’s your source for saying fee isn’t allowed on ODCs?

Curious, have you looked at FAR 52.232-7(b)(2)?

19 hours ago, formerfed said:

@CuriousContractor_22 Some questions.   Are you asking about T&M contracts in general or just task orders under GSA Schedules and other types IDIQ contracts?  You mentioned special item number and that usually refers to GSA Schedule.  What’s your source for saying fee isn’t allowed on ODCs?

Apologies @formerfed let me clarify first: yes, I meant T&M task orders under GSA Schedules. I have seen under the ANCILLARY SIN indications "markup" on ODCs negotiated on a vendors' schedule. This caught my eye and made me curious if fee/profit was acceptable on a T&M task order under GSA MAS as long as it is negotiated under something like the ANCILLARY SIN.

@Retreadfed referenced FAR 52.232-7(b)(2), which states "(7) Except as provided for in 31.205-26(e) and (f), the Government will not pay profit or fee to the prime Contractor on materials" - this is what I was thinking about with the Government not allowing fee/profit on ODCs on T&M task orders under GSA MAS. 

 

Curious, (b)(2) is an exception to (b)(7).  If a contractor provides a commercial item that it produces, the contractor can bill the government for that item at the contractor's price, which includes profit.  Check the MAS contract that you are dealing with.  It likely has a GSA version of 52.232-7.  That clause would apply to T&M orders under the contract.

To save you time going through all the clauses and background, GSA published this a few years ago.  5.15 answers your question

ODC.  Also see 3.5  saying that everything must be commercial.