Scenario: Government has a prime IDIQ contract with a $800M ceiling under which CPFF/LOE Task Orders are issued. The Task Orders are primarily for labor hours (non-commercial services). Prime contractor is stating that they estabished T&M contracts (reasonableness based on price analysis) with their subcontractor suppliers for the length of the prime IDIQ contract at the time of the initial IDIQ award (10 months ago). A new Task Order is being solicited by the Government valued at $100M. Cost or Pricing data submitted by the prime indicates they are proposing subcontract cost from one subcontractor @ $20M. Prime is stating that because they have an established subcontract already in place, they can certify to their proposed costs and do not have to cause the subcontractor to submit certified cost or pricing data to the government, even though they are proposing subcontract costs (and intend to issue a Task Order under their T&M agreement) that exceeds the $12.5M threshold referenced in FAR 15-404-3©(1)(i). Does the prime contractor have to cause the subcontractor to submit certified cost or pricing data or can the prime simply submit the subcontract agreement and the initial prime analysis used to determine the reasonableness of the T&M rates?

Chip, two questions: (1) why is the government requiring certified cost or pricing data for this TO? (This is not a challenge, but a question for information) and (2) did the prime need to get consent to subcontract when it awarded the subcontracts?

Retreaded, thanks for your response. In answer to your first question regarding why the government is requiring certified cost or pricing data for this TO:

1. None of the exceptions in 15.403-1( apply.

2. The TO is over the $700k threshold.

3. FAR 15.403-4(a)(1)(i) requires such for the award of any negotiated contract, which this TO meets the definition of per FAR 2-101

4. Since all TOs were anticipated to be Cost-type orders, no pricing exists at the IDIQ level.

In answer to your second question, the prime did not need to get consent to subcontract.

The fact that the prime already has a subcontract with the sub is irrelevant.

FAR 15.403-4 requires the submission of certified cost and pricing data "before… the award of a subcontract at any tier, if the contractor and each higher-tier subcontractor were required to furnish certified cost or pricing data…." See also FAR 15.404-3( c )(1). The award of a task order to the sub by the prime is the award of a subcontract.

The subcontract task order has not been priced. The cost of the subcontract task order will be based only in part on the labor rates in the IDIQ subcontract previously awarded. It will also be based on the labor hours that will be required to perform. Furthermore, whether the government must accept the subcontract labor rates depends on whether those rates are stated in the prime contract. If they are not, then the government does not have to accept them as fair and reasonable.

The prime must require the sub to submit.