Is it allowable for the contractor to add additional profit to their subs cost? If so, can it be negotiated and why would the contractor add such a cost?
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The issue you raise is referred to as pass-through charges. It's addressed when FAR provision 52.215-22 and clause -23 are included, which are based on contract dollar value and contract type. You can review the prescriptions at FAR 15.408(n). If your contract does not require inclusion of those clauses, then suspected excessive pass-through charges can still be negotiated with the vendor. You may also find this article on the issue to be informative.