CuriousMind Posted October 9, 2024 Report Share Posted October 9, 2024 We have a hybrid contract that is Fixed Price (FP) and Time and Materials (T&M). The government approved our REA and executed a contract modification that increased the contract ceiling and funding to include the REA amounts by CLIN (FP and T&M). The REA calculation for the T&M CLINs was based on the original PROPOSED level of effort (LOE). We submitted a true-up invoice related to the REA. The true-up invoice included the ACTUAL T&M hours incurred. The ACTUAL hours were less than the PROPOSED hours. As a result, the invoiced amounts for the T&M CLINs were less than the amounts on the contract modification for the T&M CLINs. The government came back to us and instructed us to adjust our invoiced amount on the T&M CLINs to match the executed contract modification. Meaning...the government is asking us to invoice MORE than which we think we are entitled on the T&M CLINs. Do you have any guidance that would allow us to invoice a fixed amount for an REA on a T&M CLIN? Example: CLIN 1 was T&M. Originally Proposed 100,000 hours at $20.00/hour = $2,000,000. The REA included 100,000 hours at $22.00/hour = $2,200,000. This resulted in a contract modification adding $200,000 of additional ceiling and funding. The actual hours incurred and invoiced are 95,000. We submitted a true-up invoice to the government for 95,000 hours at $2.00/hour = $190,000. The government came back and told us to invoice $200,000 to match the contract modification. In my eyes, this would result in overbilling the government (tax payers) $10,000. Our contract is much larger than this example and the 'overbilling' amount would be ~$600k. If there is any way we can justify billing the higher amount, I would love to hear thoughts. Quote Link to comment Share on other sites More sharing options...
here_2_help Posted October 13, 2024 Report Share Posted October 13, 2024 I wouldn't want to bill the government for hours not worked. I suggest you sit down with the contracting officer and walk through the situation. Suggest there is now an opportunity to deobligate some contract funds and put them to use elsewhere. Quote Link to comment Share on other sites More sharing options...
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