FFP vs FPLH vs T&M

[Deathdealer]

My question is the difference between these contract types. FFP the contractor is entitled to the full amount regardless of the labor hours worked. Fixed Price Labor Hours the contractor is entitled to be reimbursed for the hours worked at a given labor rate. Is that correct? If so,  how is Fixed Price Labor Hours different from T&M?

[Jacques]

When you say FPLH, do you mean, "firm-fixed-price, level-of-effort" as described at FAR 16.207?

[Deathdealer]

16.602 Labor-hour contracts.

Description. A labor-hour contract is a variation of the time-and-materials contract, differing only in that materials are not supplied by the contractor. See 12.207(b), 16.601(c), and 16.601(d) for application and limitations, for time-and-materials contracts that also apply to labor-hour contracts. See 12.207(b) for the use of labor-hour contracts for certain commercial services.

Should have looked hareder before posting. Thanks

[Deathdealer]

HI Jacques,

Thanks for the response. I was a bit confused. The contract has fixed price clins and T&M clins so I think it is describing both clins by using the term Fixed Price Labor Hours. Apologies for the confusion.

 

[Don Mansfield]

So you are asking about the difference between FFP and T&M?

[Retreadfed]

1 hour ago, Deathdealer said:

The contract has fixed price clins and T&M clins so I think it is describing both clins by using the term Fixed Price Labor Hours.

This indicates to me that whoever wrote the contract had no idea what they were doing.  FFP and T&M are distinct types of contracts.  If the contract has FFP CLINS and T&M CLINS, the contract is not a single contract type, but a mixed contract that should have clauses applicable to FFP contracts and clauses applicable to T&M contracts.  Further the contract should say which clauses apply to which CLINS.  Finally, note that FAR 16.102(b) reads in part "Contract types not described in this regulation shall not be used, except as a deviation under subpart 1.4."  I can find no reference to a "Fixed Price Labor Hours" contract in the FAR, thus the use of this contract type is questionable.

[Deathdealer]

Hi Don, I thought there was a Fixed Price Labor Hours contract type based on some internal naming convention. After some googling and responses here seems i was confused. My questions was what's the difference between a Fixed Price Labor Hours contract and T&M. I believe Fixed Price Labor Hours contract isn't a thing but just bad naming convention, it's a Labor Hours contract which based on the post above is a variation on a T&M. Thanks 

[Deathdealer]

Thanks Retread, this was educational for me. 

 "If the contract has FFP CLINS and T&M CLINS, the contract is not a single contract type, but a mixed contract that should have clauses applicable to FFP contracts and clauses applicable to T&M contracts.  Further the contract should say which clauses apply to which CLINS. "

[C Culham]

2 hours ago, Deathdealer said:

Should have looked hareder before posting. Thanks

I know you now understand but as to your comments, it could be a combined type contract (too bad they did not say a Combined Contract Type - FFP and LH - Ref. FAR 16.104(e))  or it could be that somebody does not know how to describe perfectly a Labor Hour Contract.  In other words if just a LH contract "fixed" could be in the description somehow but not "Firm" and "Price". 

FAR 16.601 Time and Materials Contracts...down to paragraph (b) which states (emphasis added) 

"(b) Description. A time-and-materials contract provides for acquiring supplies or services on the basis of-

(1) Direct labor hours at specified fixed hourly rates that include wages, overhead, general and administrative expenses, and profit; and

(2) Actual cost for materials (except as provided for in 31.205-26(e) and (f)).

 

[Deathdealer]

Thank you, sir. I appreciate the post; I've learned something from all of them.