Clawback in FFP contracts

[CFO]

What regulation allows for clawbacks on a FFP contract if DLHs are less than x% of planned DLHs? Are clawbacks allowable?

[Retreadfed]

By DLHs do you mean "direct labor hours"?  Also, is the contract a FFP level of effort?

[here_2_help]

CFO, have you read your contract to see if there is a contract clause that answers your question?

[CFO]

I've read the rfp.  it is not a FFP LOE, it is not a FFP economic price adjustment.  It states it is a FFP period.  It has a clause for an adjustment annually for SCA wages and benefits.  It has a clawback exercised on an annual basis for labor hours less than planned by x% by LCAT type.  The contract from this administration does not reference any FARs in the contract.  

[Retreadfed]

52 minutes ago, CFO said:

The contract from this administration does not reference any FARs in the contract.  

If the RFP/contract does not reference any FAR clauses, is the issuing agency one that is not subject to the FAR, such as the FAA, and one that has its own procurement regulations?  If so, which agency is it?  Also, are you sure we are talking about a contract and not some other type of instrument?

[CFO]

FAA and it is a negotiated rfp.

 

[here_2_help]

1 hour ago, CFO said:

I've read the rfp.  it is not a FFP LOE, it is not a FFP economic price adjustment.  It states it is a FFP period.  It has a clause for an adjustment annually for SCA wages and benefits.  It has a clawback exercised on an annual basis for labor hours less than planned by x% by LCAT type.  The contract from this administration does not reference any FARs in the contract.  

CFO,

The FAR only applies if there is a contract term in your contract (or RFP) that invokes it. Are you asking whether the government is permitted by the FAR to reduce the contract price based on a contractor's failure to deliver (for whatever reason) the contractually required labor hours? 

[formerfed]

CFO, the FAA is not subject to the FAR.  They have their own acquisition regulation with associated clauses.  It’s called the Acquisition Management System.  You can do a search to gather information.  But I doubt a clawback clause is part.  What does the RFP say?  If you don’t understand, ask the FAA contracting officer.

[CFO]

I see the FAA doesnt follow FAR.  They start the rfp with a standard form 33 (FAR) but then no reference of the body of regulation.  I see now that it is AMS and it appears that AMS does not have distinct definitions and has more flexiibility to make a ffp adjustable for hours not worked.  thanks for directing me to the right place. 

[joel hoffman]

When you said it is a negotiated contract, does that mean competitively negotiated or sole source negotiated contract? The FAA can probably set the terms and conditions as desired. If you can accept that, fine. If you can’t - no contract.