Subcontract - CPIF task order. Standard process used to build cost plus rate (1 salaried individual, 1 hourly individual on contract) cost base calculated for both types of individuals. (salary, calculated to hourly rate based on 2080 hours for the year) or (hourly rate accordingly), OH&G&A applied (accordingly)= resultant rate,
This build up was provided at bid in sanitized version to prime and un-sanitized version to govt. (approved and awarded)
Client invoiced for number of hours X Resultant rate.. in a standard month, (160 hours), Salaried individual works 120 hours, hourly works 160 hours. Client returns to question why the salaried individuals rate did not fluctuate based on the number of hours worked…. (this is where I need help)
I understand the concept of Uncompensated over time causing the cost base to fluctuate if a salaried person works more hours than a standard week / month. However, we do not have uncompensated over time, so I have no trouble making this calculation / adjustment.(this is not the issue)
But what happens when a salaried individual works “less” than a full month? Client requesting to see rate fluctuation, but based on cost build up, if I fluctuate the “cost” (which by this situation would go up, not down) would that not be double dipping, if I’m building my cost with “salaried down time” calculated into my OH already? Why would my cost change, if I’m only invoicing for the number of hours worked at the resultant rate?
Invoicing requirements stated in the contract:
Subcontract number & TTO number
Total Straight Time labor charges by person – hours, labor category , rate per hour, and extended amounts or Fixed unit price and quantity delivered
Material costs (if any)
Travel and per-diem costs (if any) itemized by TTO
Other costs incurred (if any) allowable under this subcontract
Total current invoice amount and
Cumulative billings by TTO to date
This is exactly what was provided on the invoice
Isn't this why we build a negotiated rate schedule - submit and get approved, and the true up at year end with an ICE review /submit?