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I recently started working in IDIQ Service Task Order environment with primarily SOW. That being said, as a starting point the maximum number of hours for a given position is 1820 and the duties and tasks are not open ended with the type of work expected clearly laid out. For the SOW's the number of hours for the respective positions are stated for the base period and out years - ie "Position 1- 960 hours," for a 6 month base period. Some of the TO's are LOE, LH, or FFP (right or wrongly). My team recently awarded a TO and it was my position that it would be FFP. The SOW stipulated that hours and positions may be trimmed/increased based on conditions related to workload, but the tasks of the contractor is clearly defined. The SOW established expected hours for the respective positions. The TO has a 9 month base, a 3, 6 month options, with fixed labor rates (fully burdened) based on the rates negotiated at IDIQ level. Further, the duties are defined and not ambiguous and are more administrative than anything. The Contractor said it should be LOE, vice FFP. I disagree. For FFP LOE per FAR 16.207-1(b), with respect to FFP LOE, it reads that the government pays the contractor a fixed amount, which I read is to basically guarantee a fixed amount of money, regardless of whether services of equal value were provided. Further the work is not "for investigation or study in a specific research and development area." For LH: The application of LH reads FAR 16.601(2)(b) "Application. A time-and-materials contract may be used only when it is not possible at the time of placing the contract to estimate accurately the extent or duration of the work or to anticipate costs with any reasonable degree of confidence. See 12.207(b) for the use of time-and-material contracts for certain commercial services." We set the contract up with a 9 month base and the option periods based on our expectation of how long the services may be needed and the option periods to serve as a contingency if you will. So I don''t think the above, allows for use of LH in this situation. Thus, I think FFP, whereby the contractor invoices based o the number of actual hours worked is the most sensical approach. In simplistic terms, if 10 contractor's work 5 hours a day for 7 days" then they'd invoice for 350 hours for that period. I did some research and there seemed to be different philosophical views on whether a particular service contract should be FFP LOE/FFP/LH and it almost seemed like people prefer one over the other, not because its right, but because its just how they've always done it. My previous experience was in commercial FFP EPA IDIQ supply contracts, so I don't have as much familiarity with service contracts, so I appreciate anyone's thoughts/perspectives.
SITUATION: I work for the Department of Defense (DOD), and my office executes a healthy number of time-and-materials/labor-hour (T&M/LH) determination and findings (D&Fs). My leadership has decided, at legal counsel's suggestion, that the requirements of DFARS 212.207(b)(iii) can apply to all commercial T&M/LH D&Fs, including those done under the authority of FAR 8.404(h)(3). The upshot is that nearly all such D&Fs require Head of Agency (HOA) signature, since nearly all are defined under paragraph (6) of the "commercial item" definition. As you can imagine, this has created an administrative inconvenience. (The idea of delegating this approval authority to the Head of Contracting Activity (HCA) has been raised and rejected.) QUESTION: My question can be phrased specifically or broadly: Specifically, should HOA signature on commercial T&M/LH D&Fs, in accordance with DFARS 212.207(b)(iii), be required when using FAR 8.4 procedures? Broadly, where FAR 12 specifically instructs the reader to defer to FAR 8.4 on a topic, can DFARS 212 "override" FAR 12? DISCUSSION: I suspect that the answer is "no" (acknowledging that my response is at least partially biased). Part of the challenge here is that for DOD employees, there are no less than 5 different regulatory parts that provide T&M/LH guidance. I will attempt to address each in a logical order in walking through my thinking on this: FAR 16.601(d) provides general guidance for a D&F, and directs the reader to FAR 12.207(b) for "further limitations" when purchasing commercial services. Diverting for a moment to FAR 12.102(c), this assigns precedence to FAR 12 over conflicting FAR parts when purchasing commercial items. FAR 12.207(b)(1) and (2) provide commercial item D&F guidance; however, 12.207(b)(4) states: "See 8.404(h) for the requirement for determination and findings when using Federal Supply Schedules." In my opinion, this language unambiguously intends for the reader to exclusively defer to 8.4 for T&M/LH D&F guidance when using 8.4 procedures. (Compare the language in (b)(4) to the "additional approval" language in (b)(3).) Based on #3, there is no conflict as described under #2. FAR 12 defers to FAR 8 on this specific topic. As promised, 8.404(h) creates its own set of D&F requirements. Significantly, the highest stated approval authority here is HCA. Strangely, DFARS 208 is silent on the topic of T&M/LH contracts. DFARS 212.207(b), however, creates additional limitations when using T&M/LH contract types for commercial items. Specifically, (b)(iii) requires HOA approval when paragraph (6) of the "commercial item" definition applies. DFARS 216.201(d) provides additional limitations and guidance for T&M/LH D&Fs. My opinion is that if DFARS intended to impact the FAR guidance to defer to FAR 8 in these situations, it should have unambiguously done so by addressing it under DFARS 208 (as it did under DFARS 212 and 216). The most compelling counter-argument I've heard is that this reading would nullify the intent of NDAA for FY 2008 (on which DFARS 212.207(b) is based), which views T&M/LH contracts with skepticism and attempts to limit their usage. I agree that it would have been odd for DOD to intend to allow for a FAR 8.4 T&M/LH loophole, but in effect I believe this is what it did by neglecting to address the topic under DFARS 208. What say you, Wifcon community?
I support a program with contracts defined as firm-fixed price (FFP), labor hour (LH), time and material (TM), indefinite delivery indefinite quantity (IDIQ) with economic price adjustments from collective bargaining agreements (CBAs)/ wage determinations (WDs). The contracts were awarded under FAR 15 with adequate price competition. Due to some security aspects in the SOW the effort is considered non-commercial and agency described as design/detail. Historically, the program has considered these contracts exempt from Cost Accounting Standards (CAS) per the exempted category (15) below, as there was always adequate price competition and they have not collected cost or pricing data with the offers. Is this interpretation correct? (b) The following categories of contracts and subcontracts are exempt from all CAS requirements: (1) Sealed bid contracts (2) Negotiated contracts and subcontracts not in excess of $500,000. For purposes of this paragraph (b)2 an order issued by one segment to another segment shall be treated as a subcontract (3) Contracts and subcontracts with small businesses. (4) Contracts and subcontracts with foreign governments or their agents or instrumentalities or, insofar as the requirements of CAS other than 9904.401 and 9904.402 are concerned, any contract or subcontract awarded to a foreign concern. (5) Contracts and subcontracts in which the price is set by law or regulation. (6) Firm fixed priced and fixed price with economic price adjustment (provided that the price adjustment is not based on actual costs incurred) contracts and subcontracts for the acquisition of commercial items (7) Contracts or subcontracts of less than $7.5 million, provided that, at the time of award, the business unit of the contractor or subcontractor is not currently performing any CAS-covered contracts of subcontracts valued at $7.5 million or greater. (8-11) [Reserved] (12) Contracts and subcontracts awarded to the United Kingdom contractor for performance substantially in the United Kingdom, provided that the contractor has filed with the United Kingdom Ministry of Defence, for retention by the Ministry, a completed Disclosure Statement (Form No. CASB-DS-1) which shall adequately describe its cost accounting practices. Whenever that contractor is already required to follow U.K. Government Accounting Conventions, the disclosed practices shall be in accord with the requirements of those conventions. (See 9903.201-4(d).) (13) Subcontractors under the NATO PHM Ship program to be performed outside the United States by a foreign concern. (14) Contracts and subcontracts to be executed and performed entirely outside the United States, its territories, and possessions (15) Firm fixed price contracts or subcontracts awarded on the basis of adequate price competition without submission of cost or pricing data.