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    Hello, can someone please help me understand if specific labor categories are required to award an FFP LOE TO? I have researched FFP LOE and gather that rates are not involved and the Gov is awarding a FFP for an amount of labor (hours in this case); however, we are stuck on whether or not the contract can just be for hours and use the expected number and labor categories for negotiation purposes or if the exact labor hours in the contract needs to be broken down into number of workers in each category. Ideally, the former would be true so that the contractor has the flexibility to change the labor categories if need be (as long as the hours don't change) without the need for a mod. Thank you in advance!

    Answer

    Great question! FAR 16.207 is very brief in describing this contract type and the DFARS is silent. FAR 16.207 says the government will pay "a fixed dollar amount". It does not say how to do that, so that is the choice of the contracting officer. As long as the determination of fair and reasonable pricing can articulate how the fixed dollar amount is reached, there should be flexibility in terms of not locking down the contract labor categories. The contractor will be paid not for their performance, but the negotiated fixed priced for their level of effort. As a reminder, this contract type is capped at the SAT unless the COCO approved a higher amount. 

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