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  • Question

    When establishing an IDIQ for professional services is an audit of loaded labor rates required for prime and subconsultant firms? If no audit is required, how is fair and reasonable price determined for each offeror? Considering G&A, ODCs and profit?


    (The following response is based on additional input from the submitter.)

    Do you have more than one offeror for each labor category at each location? If not, was there at least a reasonable expectation of receiving competitive offers? This is at FAR 15.403-1(c)(1)(i) and (ii) and that in itself can be used to establish price reasonableness. If there are certain labor categories for some locations that don't meet the criteria for adequate price competition, you might also be able to determine reasonableness using one of the techniques at FAR 15.404-1(b)(2). It doesn't matter where the firms are located. It only matters what labor rates they are proposing at the different work locations. The bottom line is that most contracting officers prefer not to have to perform detailed cost analysis on offers. If there's a way to determine price reasonableness with adequate price competition (most common) or one of the other techniques at FAR 15.404-1, they do so.

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