DE13151719

We are awarding a subcontract under our DoD CPFF prime contract. Our contract contains 52.244-2 Subcontracts. We do not have an approved purchasing system. The subcontract we are awarding is FFP, and the subcontract is valued under 5% of the total estimated cost of the contract (which is the greater between the simplified acquisition threshold and 5% of the total estimated cost). Based on this, we do NOT need permission to subcontract. We do not have an especially communicative KO. However, I'm wondering if in the spirit of maintaining an open and communicative relationship, should I notify the KO? Or will they respond like "why are you telling me this, get out of here." Thanks!

Retreadfed, yes I mispoke. I wrote intermittently funded when I meant incrementally funded.

Thank you Vern! Hope you're doing well.

Experts, We are currently performing under a DoD CPFF research contract. I would like to award a FFP subcontract to perform a study for us, which ideally would be over a 9 month period. However, the CPFF contract is intermittently funded, and at the time of placing the FFP subcontract, we would not have the funds for the full 9 months. Thinking outside of the box (but still within the FAR), how could I do this? Could I do it in three month periods, with two additional options? Each period would have a final report deliverable. Perhaps I could award a FFP-LOE with subclins, however I do want to avoid the impression that I'm essentially faking a T&M subcontract. Our contract does have FAR 52.244-2 Subcontracts (2020), and with regards to (c)(2)(I), the overall value would be less than 5% of the total cost of the contract.

Hello! Contractor here, with a CPFF contract for a research effort. Our original cost proposal included a slew of labor categories for (I believe) cost analysis purposes. Our final contract doesn't specify anything about LOE, or approved labor categories. We have a new individual working on this effort (COTR is aware), but he would fall into a different labor category than what was on the original proposal. From my perspective, the labor category name is a moot point as we aren't locked into any specific approved rates via a labor category. Do we need to provide any sort of notification, or new proposal activity? As it is a cost type, and not T&M I can't find a requirement in writing anywhere. If this does require some sort of approval, what guidance specifies that? Thank you.

Thank you. I've been in touch with our PTAC on other matters and didn't consider their assistance in this instance.

Neil, Thanks for your response. 1. Our contract does has 52.244-2 and it applies to the subcontract type, we do not have an approved purchasing system. 2. I was under the same impression - I've never worked with DCMA for subcontract approval. In our specific instance, our contracting officer delegated certain administrative duties to DCMA at contract award, pursuant to FAR 42.302(a)(51) - "Consent to the placement of subcontracts." In fact, my ACO said that they rarely are the source of permission of consent to subcontract which is why it seems they have more stringent requirements. He said that almost NEVER accept sole source justification, so at this point we'll be seeking out other companies for solicitations.

We're a small business with our first prime contract. We had a subcontractor we were planning on working with on our prime contract, and DCMA denied our sole source justification. So let's say our next step is to issue an RFP to do a competitive award for a subcontract. I understand issuing RFPs, reviewing proposals, and putting together our subcontract package. What avenue do we actually use to solicit proposals from potential subcontractors for this?

Vern, The subtext I'm getting from your comment is that the contracting world (even in DoD contracting) does not normally reference the Green Book. That document contains what the DoD recognizes as accepted inflation rates for future estimating, so to me it seemed like a solid reference for inflation rates for future estimating.

Thank you Here 2 Help. We can handle the rate at 1% escalation. It's actually only for a handful of people, so in the grand scheme of things not a big deal. However, we anticipate that we will be working with the same prime on a similar effort in the future so it's more of a strategic move keeping future rates in mind.

Thanks for the response. The original subK did specify a 1% increase. The contract had three options periods (all exercised). The customer elected an extension based on covid delays. We are outside of the outyears originally negotiated 4 years ago, which is what prompted the prime to reach out to all of the subs specifically asking for new rates. I think 1% is extremely low, and our rate was lowballed to begin with 4 years ago. It sounds like what you are saying is that asking for a rate increase based on increased costs we are currently experiencing as a company (and have over the past 4 years) may be more convincing than citing a labor statistic. Do I have that right?

Vern - I would make the strongest argument by citing the FY22 Green Book instead of the BLS. The fact that there is a disconnect between the two means I am misunderstanding the way the CPI is calculated in the Green Book. Specifically I am looking for help (perhaps arithmetically) in understanding how to get an accurate CPI from the Green Book.

We've had an option year granted on a subcontract and I'm looking to negotiate for higher escalation rate than 1% due to the actual CPI. The BLS is publishing that the current CY21 CPI is 6.8% (Link - Table A). However, the index listed in the FY22 Green Book give a dramatically different answer - only 2% in the Green Book, Table 5-1 on pg 59 (link), it lists 2021 as 98.04 and 2022 as 100 (as it is the base). Dividing 100/98.04 only yields 2%. I think I'm misunderstanding the table in the Green Book, or how to use it to get an industry accepted escalation rate. Any help would be appreciated!

Retreadfed - No, it is a R&D effort.

Background: CPFF contract, funds come from different agency than the contract is issued by. Sometimes the MIPR takes time to hit the contract because of IAAs and the paperwork trail. We invoice costs monthly, however there is nothing stipulating that we need to invoice monthly. Cost vouchers are not connected to specific deliverables. When we did similar work as a sub, we would occasionally work "at-risk" when the money on our subK was fully expended but we knew funds were enroute with a MIPR (with the permission of our prime). Now we are performing under our own prime contract. Is there anything in the FAR that precludes us from doing this? Hypothetically, say our funding runs out on 5 January. Funds have been sent from the customer, but aren't on the contract yet. Can we continue work until they are available? We technically don't need to invoice at any particular time, so couldn't we just hold off invoicing anything until the funds have been modded to our contract? We provided the CO with the 75% of funds expended notification. THANK YOU!

We're contemplating a contract that invokes FAR 52.216-8 - fee withholding. I understand that we will withhold invoicing fee up to $100,000 or 15% of the whole fee (whichever is less). Once we pass that threshold we will invoice fee as appropriate. That much makes sense. However, when I read the clause as written in the FAR, I don't see how 100% of the fee is eventually paid to the contractor - am I missing something? The clause says that the CO shall release 75% of fee withholds, and up to 90% of fee withholds based on past performance. So is it implied that the best you can hope is that the government keeps 10% of the fee withholds? It's certainly small potatoes compared to the overall contract value, but I want to clearly comprehend this clause. Thank you as always!

Thank you to both Neil Roberts and here_2_help!

Thanks for your help in advance. I have two questions, both pertaining to a CPFF effort. I am a contractor assembling a proposal to be a prime. Question #1: The contract period is a base period of 1 year, followed by 2 option years. The government fiscal year and the contract period dates do not line up. I have costs broken down by element by both the government fiscal year and contract period. Will the fee $ amount be set based on the government fiscal year, base period, or base period plus option years (very unlikely I imagine)? The contract will be completion form, but the "end product" will be the monthly reports on a continual effort vice a term form with a set LOE. Question #2: We do not currently have a certified final indirect cost rate proposal, and are using estimated indirect rates for the proposal. I want to make sure I understand the process - after a period of time, we will submit a certified final indirect cost rate proposal. Is that period of time a government fiscal year, or at the end of the base period?