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FFP cost breakdowns


LOML

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I have an IDIQ contract that is FFP, which was done by another contracting office and transferred over to my office. The IDIQ clearly states the contract type as FFP. The IDIQ also gives directions on how to submit a COST proposal; and to break it down by the traditional elements of a CR contract (Direct Labor, Indirects, Materials, Travel, ODCs, subcontracts, and profit/fee...etc. 

For a previous TO we issued off this IDIQ the CTR refused to breakdown the costs in their invoices and charged us a monthly lump sum, saying they are not required to do it IAW with the PWS/CDRLs. For the 2nd TO we are getting ready to issue, I ensured that this time around there were no ambiguities on providing a cost breakdown in their invoices. We included language in the PWS and added a CDRL asking the CTR to submit the cost breakdown when submitting their invoices.

Now, the CTR is coming back and saying, per the contract type, the CDRL requirement is not valid, and they are not required to do it. 

 

 

 

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20 minutes ago, LOML said:

The IDIQ also gives directions on how to submit a COST proposal;

You did not say that the contract requires similar information to be submitted on invoices.  If the TO is truly FFP, why would you want that information on an invoice.  After all, it does not matter what costs the contractor incurs, it will be paid the contract price in any event.

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True; but our program office wants to know the invoice breakdown for labor, indirects, ODCs...etc. What is preventing us from including a CDRL and PWS language to require the CTR to accept these terms at the individual TO level? Is there anything in FAR 16, FFP contract types that I am missing? 

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The contract is already formed and agreed to.  

If you want something different for a task order, will you try to negotiate that with the contractor?  Maybe the contractor will agree, maybe for an additional price -- but if the contractor won't agree, are you asking if you can unilaterally impose the requirement with the next task order?

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17 hours ago, LOML said:

True; but our program office wants to know the invoice breakdown for labor, indirects, ODCs...etc. What is preventing us from including a CDRL and PWS language to require the CTR to accept these terms at the individual TO level? Is there anything in FAR 16, FFP contract types that I am missing? 

Please clarify.

If the task orders are FFP, then what does the program office want to know? Does it want the contractor to report their actual costs as opposed the amount invoiced? If so, does it want that information in order to judge the reasonableness of the contractor's prices?

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If I were the Ktr I would be very reluctant to provide a cost breakdown for a lump-sum/FFP invoice. We have an agreement as to price; the costs incurred are irrelevant. To Vern's question, if the program office wants cost information to help shape future bids, this is not the right way to obtain such information, in my opinion. More importantly, the Ktr may not have an accounting system that is adequate to track/report its costs by cost element. The Ktr doesn't need an "adequate" accounting system in order to perform an FFP contract.

You want a cost breakdown generated from an adequate accounting system? Then issue a cost-type contract and have DCAA (or equivalent) perform a pre-award accounting system survey. Make sure the Ktr can actually report what the program office wants to see.

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On 9/3/2024 at 1:56 PM, LOML said:

Is there anything in FAR 16, FFP contract types that I am missing? 

Yes after re-reading this thread I think you are missing what the parent IDIQ contract says or does not say.  It is the rule book so to speak not the FAR.  You say cost proposals required by contract. Okay, but does the parent contract say CDRL's will be, or may be required on TO's?  As noted in a previous response the contractor may be right, you are asking for something not required by contract language.  

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On 9/3/2024 at 2:11 PM, LOML said:

Now, the CTR is coming back and saying, per the contract type, the CDRL requirement is not valid, and they are not required to do it. 

Is “now” before finalizing the task order or after bilateral agreement and issuance?  If before, II definitely would agree with the contractor. If the contractor agreed with the requirement during the negotiation of the task order and later balks, I’d disagree…

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On FFP construction contracts for lump sum CLINs, the Corps of Engineers for decades has required and obtained rather high level breakdowns of the CLIN  values -  to assign to schedule activities for tracking progress and for preparing progress payment invoices. It might include percentages of labor and materials and sometimes mobilization share of the CLIN price. If a lump sum activity was subcontracted, they would provide that value and any high level breakout.  But I’ve never seen a requirement for reporting detailed actual costs for the direct and indirect  “costs” for invoicing on lump sum CLINs. We’d use the percent progress performed.

I do remember one large RR bridge and trestle project where the subcontract cost for the bridge fabrication and materials was more than the entire CLIN price for the installed bridge. So they had to prorate the subcontract cost for the fabricated bridge materials, shipping  and installation for progress estimates. Of course they made up that underbid item on other parts of the project.

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Quote

True; but our program office wants to know the invoice breakdown for labor, indirects, ODCs...etc. 

Have you considered the possibility that your program office is a bunch of idiots? Overheads, etc., are not in the program office's purview regardless of the contract type scenario.

Is the IDIQ single or multi-award? If it's under Part 36 that has implications as well.

 

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1 hour ago, REA'n Maker said:

a bunch of idiots

Stop.  Just stop.  That is unproductive diatribe.  Have a little reverence for the mission, please.

@LOML Please read and reread this article by @Vern Edwards instead of hanging out here any longer.

Edwards, Vernon - Lifelong Learning, Cultivated Curiousity and Self-Interrogation.pdf (wifcon.com)

Take its teachings to heart and you can be the smartest person at the table in a meeting about FFP cost breakdowns someday if you want.  I say go for it.

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LOML hasn’t come back with additional information so we’re left with speculation.  But I can see two reasons which a program office, especially one with limited understanding on the contracting process might want this data.  One is for negotiation of future task orders.  The other is providing assurances that the contractor is making satisfactory towards final performance objectives.  It’s important for the contracting office to understand program offices needs upfront and craft an approach to help meet those without surprises like this later.

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On 9/4/2024 at 6:17 AM, C Culham said:

Why?  As others have stated the Firm Fixed Price is the Firm Fixed Price!

 

On 9/4/2024 at 10:16 AM, Vern Edwards said:

Please clarify.

If the task orders are FFP, then what does the program office want to know? Does it want the contractor to report their actual costs as opposed the amount invoiced? If so, does it want that information in order to judge the reasonableness of the contractor's prices?

 

On 9/4/2024 at 12:01 PM, Retreadfed said:

Are you talking about invoices for completed and accepted work or are you talking about progress payments?

 

On 9/5/2024 at 11:47 AM, C Culham said:

You say cost proposals required by contract. Okay, but does the parent contract say CDRL's will be, or may be required on TO's?  As noted in a previous response the contractor may be right, you are asking for something not required by contract language.  

 

On 9/5/2024 at 3:03 PM, joel hoffman said:

Is “now” before finalizing the task order or after bilateral agreement and issuance?  

 

21 hours ago, REA'n Maker said:

Have you considered the possibility that your program office is a bunch of idiots? Overheads, etc., are not in the program office's purview regardless of the contract type scenario.

Is the IDIQ single or multi-award? If it's under Part 36 that has implications as well.

 

 

18 hours ago, formerfed said:

LOML hasn’t come back with additional information so we’re left with speculation.

LOML has disengaged from the thread after 3 September,  leavingw many responders’ questions unanswered and much speculation.

I suggest we not waste any more time continuing to respond…

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