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  • Question

    Is it proper to use only Labor costs at Block 20 in the WGL, as these are "fee-bearing" costs instead of total costs, or does DFARS 215-404-71-2 (b) (4) prevail?


    Answer

    If your RFP stated that travel and material would not be fee bearing, then the contracting officer must have determined that there would be no or virtually  no associated risk to the contractor for these cost areas.  It seems appropriate that in determining your negotiation position using the DFARS Weighted Guidelines, travel and material would be excluded from the basis of  determination (Block 20).  Irrespective of what the contractor thinks, you now must negotiate.  Has the contractor convinced you that travel and material should be fee bearing or has other risk related facts come to light after the RFP was completed?  Negotiating profit is difficult; that's why the FAR requires a structured approach to arrive at a negotiation position for profit and why the weighted guidelines have been constructed to frame a starting point.
     

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