FAR Sub-part 15.402 (b)(Pricing Policy) states to price out each contract separately and independently.
I have several questions.
1). Based upon the FAR reference above, I have the understanding that even though the basic ID/IQ contract will not be funded (the individual task orders will be funded), we are still required to evaluate (all five years) the costs for the base year and option years 1-4. Is that correct?
2) We can use a sample task order that covers all five years in order to evaluate escalations in indirect and direct rates - but we have to evaluate costs for the five year period - is that correct?
2) Because this ID/IQ is a cost reimbursable type contract, cost analysis and cost realism will also need to be accomplished. is that correct?
It is incorrect to say that we will evaluate costs at the task or delivery order level and do not need to evaluate the basic ID/IQ over five years - Is that INCORRECT?
3) This contract vehicle will have a T&M type CLIN for labor. Labor will be proposed over five years and if these rates are determined reasonable, I will put them in a T&M table and insert the table into my contract so that the contractor will be bound by these rates. meaning that they are required to be used for each future awarded task order. is that correct?
4) This contract vehicle will have a CPFF CLIN for labor. Labor will be proposed over five years and if these rates are determined reasonable, they too will bind the contractor? Can I put a table similar to the T&M to illustrate the CPFF base labor rates (not fully burdened labor rate) over five years so that these rates shall be used in future task orders. is that correct?
5) There is a disagreement in my office regarding the T&M and CPFF labor CLINs. My peer believes that we cannot bind CPFF labor rates because we are required to pay the contractor their costs, no matter what they are. I'm thinking - then why evaluate them?
They say that labor costs will fluctuate due to their indirect rates being fluid. I'm thinking ok- their fully burdened labor rates will fluctuate by they should know what the base labor rate will be by applying their escalation methodology....
My thoughts are that we can bind the base labor rate to control escalation over five years and if we do not try to control these costs we are not good stewards of the tax payers money.
They said that if we try to bind labor rates on a CPFF, then we are essentially turning the CPFF into a T&M. I disagree as a T&M is billing a labor unit/hr with no requirement to provide an end product whereas a CPFF is best effort to complete the required effort. Binding CPFF base labor rates (not fully burdened labor rates because they are fluid) does not make it a T&M type contract - is that right?
6) To answer the question - BIND the IDIQ contract to satisfy CICA - what does that mean exactly? Are we required to award a funded task or delivery order at the same time as the basic ID/IQ in order to bind it? What if we do not award a task or delivery order right away?
What if we have FFP type CLINs as well as a CLIN with Min/Max. Which CLINs are required to be funded to bind the contract? Can you explain this a little better - thanks.
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Please see below which reflects my answers to your questions as written.
#2 YES, YES, YES
#4 As written I have no definite answer to this question
#5 As written I have no definite answer to this question