Can we tell the contractor our bottom line funding we have and ask they redistribute labor hours according to meeting budget constraints? Can we accept the proposal as long as it meets the SOW requirements and is reasonable enough to complete the overall project?
I am assuming you are in a sole source environment because a new solicitation could address the manning mix required to perform your service. You are buying a capability so identify the effort in performance based terms with measurable outcomes and standards of performance and allow the contractors to identify the labor mix to do the work and you make a best value selection. The Government agrees with the total hours but not the labor mix.
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The key issue you are facing is that you and your team know the labor mix is unbalanced by focusing on utilizing more PM hours than involved in prior buys which will drive cost. Key question, Can you make a reasonable determination that the price is fair and reasonable?
If in consultation with your technical community, it is found that the price and labor mix is reasonable, go along with the buy. If not, compete the effort. I make this statement not knowing the particular service that you are acquiring.
You have to make a price fair and reasonable decision with the knowledge that you have about the program while consulting with your technical team. Based upon the information that you've provided, I don't think the contractor will change their proposed labor mix based upon your providing information as to your budget. However, pose the question to your contractor (without $s) and they should be able to provide you a response as to whether such a revelation can result in a change to their labor mix to accomplish the work. Any result you agree on must be properly documented.