Pricing vs Contract Language

[Deathdealer]

 

On a labor hours contract, a nearly identical service is offered (palm reading for example). We have ongoing weekly services that we are allowed to charge one rate for (ex $30/hr) & then we have random pop up events that the contract says we can charge $50/hr.

At times the agency will ask us to flex a daily palm readers time (work less hours during the week) to cover a pop up event and only allow us to charge the daily $30/hr rate although the event type is one the contract states we can charge $50/hr for the pop up event.

I always assume what is in the contract is what we should be able to bill. I have heard the statement "it not only depends on what the contract states but also how it was initially priced."  I'm trying to understand this statement and how the initial pricing should be considered vs what the contract language states. I hope this is coherent, if not I am sure I will know soon enough  

[C Culham]

2 hours ago, Deathdealer said:

 

On a labor hours contract, a nearly identical service is offered (palm reading for example). We have ongoing weekly services that we are allowed to charge one rate for (ex $30/hr) & then we have random pop up events that the contract says we can charge $50/hr.

At times the agency will ask us to flex a daily palm readers time (work less hours during the week) to cover a pop up event and only allow us to charge the daily $30/hr rate although the event type is one the contract states we can charge $50/hr for the pop up event.

I always assume what is in the contract is what we should be able to bill. I have heard the statement "it not only depends on what the contract states but also how it was initially priced."  I'm trying to understand this statement and how the initial pricing should be considered vs what the contract language states. I hope this is coherent, if not I am sure I will know soon enough  

With the details provided it is my view it is what the contract states as that is the intent of contract isn't it?   I could see where the agency could say something in the contract that today we need palm readers to complete what is at hand today and then the next day we believe we have needs for the pop-up to accomplish the need.   Contract language would tell me if such requests would be allowed.  I will also say that setting up a labor hour contract in such a manner could be contrary to the general view that a labor hour contract does not buy hours it buys services to accomplish something where 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"  (Quote from the FAR regarding application of labor hour contracts).   

This reference is dated but it is a good read, it might help you further.      The Time-and-Materials Contract: The Time Has Come For A Long, Hard Look    Go here https://www.wifcon.com/analysis.htm scroll down to 2004 and find this article, it might help explain how LH is to work but it may not be how the agency thought their contract should work..  While it is about T&M the concepts apply to LH. 

[Deathdealer]

Thank you Carl (I think). Have read many of your posts & appreciate all of your contributions & response. Will definitely add this to my reading list!