On a CPFF contract, can a subcontractor use a contract labor category when it was not in their proposal but in the prime's proposal? If so, are there any special steps to be taken before authorizing?
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If it's acceptable to the customer and to the contracting officer, then I don't see anything here to indicate it would be unacceptable. The subcontractor can do whatever it thinks necessary to fulfill its contractual obligations to the prime contractor. Remember, the Government has a contract only with the prime contractor. If there is a change to a labor category that the Government contracting officer agrees is justified in order to meet the Government's requirement as originally contemplated, the change can be formalized via contract modification. If inclusion of the new labor category changes the original scope of the overall project, then a Justification & Approval may need to be accomplished in accordance with FAR 6.302, if applicable.