Our KO wants to convert before exercising OY4. This is essentially a PMO CLIN. Under FFP we staffed it without concern for govt approval of reasonableness or realism. We used the funds available and created the best PMO and has executed well. Now that the negotiation of the CLIN under CPFF is taking place, we provided actual salaries and they are objecting to the being higher than their salary surveys. We would have to replace the entire staff as we have no plans to cut their salaries. They risk attrition, vacancy, and deteriorating performance. Doesn't our disclosure of the actual salaries constitute a BOE the Govt, can award? Is it unreasonable for the govt. exert such disruption to the Program Management function since they were responsible for wanting the conversion?

21 hours ago, Richardp60 said:

Doesn't our disclosure of the actual salaries constitute a BOE the Govt, can award?

I assume that "BOE" means basis of estimate. That being the case, I don't understand the question. The government does not "award" a basis of estimate. Do you mean a CPFF estimated cost? Are you asking whether your actual salaries could be one of the bases for negotiation a CPFF estimated cost? If so, the answer is yes.

21 hours ago, Richardp60 said:

Is it unreasonable for the govt. exert such disruption to the Program Management function since they were responsible for wanting the conversion?

I have no idea whether it is unreasonable. You apparently think it is. How would any of us know?

23 hours ago, Richardp60 said:

Our KO wants to convert before exercising OY4. This is essentially a PMO CLIN. Under FFP we staffed it without concern for govt approval of reasonableness or realism. We used the funds available and created the best PMO and has executed well. Now that the negotiation of the CLIN under CPFF is taking place, we provided actual salaries and they are objecting to the being higher than their salary surveys. We would have to replace the entire staff as we have no plans to cut their salaries. They risk attrition, vacancy, and deteriorating performance. Doesn't our disclosure of the actual salaries constitute a BOE the Govt, can award? Is it unreasonable for the govt. exert such disruption to the Program Management function since they were responsible for wanting the conversion?

I assume that there is a FFP CLIN for out year four.

Question: Is the Government wanting to convert to CPFF because they feel the price is too high (e.g., unreasonable or lack of available funding)?

On 2/13/2026 at 10:05 AM, Richardp60 said:

We would have to replace the entire staff as we have no plans to cut their salaries. They risk attrition, vacancy, and deteriorating performance.

While one can negotiate anything they want to change a contract there are sometimes concepts that help in the negotiation that is satisfactory to both parties. In your case it would seem that you are concerned about the heavy handedness of the Governments negotiation position. An issue you will have to work through in the negotiations . This said there are some thoughts that jumped into my head that I might use to strengthen my position if I were in your shoes.

Contract type - Was the contract awarded as a commercial services contract? If so has the agency considered the limitation on use of CPFF in commercial service contracting? (Ref: FAR 12.207) I mention without knowing the the true intention of the agency but I have got to guess that it is a cost saving matter or a control matter. I do wonder if a commercial services acquisition why they would not possibly look to options such as economic pricee adjustment or time and materials to accomplish whatever they are trying to accomplish.

Scope - Some will call me out on this but is the agency changing the scope of the contract? I mention this from the standpoint that if the agency wants to push the heavy hand to the point of using a unliateral modification to make the change. The thought of "scope" might help in your effort to push your point as remember in scope or out the change can be made but mentioning scope might give cause to the agency to think. I did mention that some may call me out for mentioning this angle to negotiations and to this thought on my part here is past WIFCON discussion that I hope you read that will add clarity to the thought of scope. It just seems that based on your quote above the government is doing more than just changing a price structure. https://www.wifcon.com/discussion/index.php?/forums/topic/3866-adding-cost-reimbursement-clins-to-a-52217-9-extension/

Pay particular attention to the last post in thread by Vern Edwards.

All said the one thing that seems clear to me, or at least not offered in your post is the "Why" to the change. I would suggest that if everyone agrees to the "Why" and its benefit to both parties your concerns of BOE and reasonable might just be bridged.

Until the OP responds, we don’t know the reason why the KO wants to convert. But the company I worked for faced similar situations several times. It usually started out negotiating a firm fixed price contract with options for continued performance. We went in proposing the level of effort and mix of personnel we were comfortable with to perform well.

Over time we learned the work, found efficiencies, and were able to get by with fewer staff hours while achieving consistent performance results. We continued though to provide the same high caliber people we initially proposed and won the competition with. The government though expressed we made too much money and sought reductions in price or negotiating another contract type. I think in all but one instance, the government backed off after we explained all the benefits we provided that they likely lost sight of.

In one instance, neither us nor the government budged. We continued to perform the next option which gave the government time to conduct a new competition and we ended up walking away.