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    With respect to ceiling rates, should not the Requiring Activity do this since they are receiving funds incrementally? Should not Contracting be asking for any adjustments in cost (labor rates) from the Contractor and we negotiate those new rates if it changed since first awarded? Thanks


    (Note: This response is provided without having received clarifying information from the submitter.) Your question pertains to monitoring changes in ceiling rates. However, there should be no changes in labor costs for an FFP-LOE contract. The "FFP" means that a bottom-line price is negotiated and established at award for the life of the contract. The only reason labor costs should change is if the scope of work were to change. In that case, a bilateral modification would be necessary to reflect the increased labor rates due the changed scope.

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