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  • Question

    Under a services IDIQ contract, can you add a fixed rate to a CLIN that is already Cost Reimbursable?


    Answer

    IDIQ contracts may contain multiple pricing arrangements (contract types) for use in pricing individual task orders. Based on the limited background information, it seems this is the case in this situation. It appears the contractor is being paid on a cost-reimbursement, no fee basis for transportation and all associated transportation costs. The material handling rate is an indirect cost rate that is allowable under the cost principles of FAR Part 31. Material handling costs are usually required to be segregated in a separate indirect cost pool by a contractor's accounting system.

    If the contractor does not have a separate material handling pool, the government can negotiate an advance agreement in the contract requiring such a pool, as well as advance agreement on the components of the pool, and place a cap or ceiling on the rate, that would be adjustable downward only at the time of final cost audit. This may have been the case in this contract. Researching regulations (FAR/DFARS) has not resulted in any information indicating this is unallowable. Also the use of the term "source selection" says this was a competitive acquisition and all offerors would have been aware of this in the RFP.

    Based on background information, one is led to believe that offerors were allowed to propose versus "bid" the rate since it was a "blank" in the RFP as indicated. One must then assume that each offer was evaluated and the proposed rate was evaluated as a factor/subfactor to determine the proposal that was the best value. And the fact that this was a competitive acquisition, competition would have been the best price analysis technique to determine that the rate was fair and reasonable.

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