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  • Question

    What do I ask for (of these 7)?...I take it fully burdened with the exception of the fee/profit?...How would I evaluate the CPFF rates for best value? How is a CPFF administered...how is the profit tied to the task...by the hourly rate..or ? Thanks! Val


    Answer

    You are correct that FAR and DoD policy encourage the use of contract types other than time and materials (T&M), so moving to a cost plus fixed fee (CPFF) arrangement makes more sense. See FAR 16.306 and the corresponding DFARS coverage for detailed information on CPFF contracts. The Factors in Selecting Contract Types site may also be helpful.
    Regarding your specific questions: Yes, the proposed rates will be fully burdened with the exception of fee (which will be negotiated separately, based on estimated total cost). The evaluation of "best value" should include not only the rates, but tradeoff considerations as well (see FAR 15.101-1). CPFF contracts are administered like other cost reimbursement contracts are administered.

    A full explanation is beyond the scope of this forum, but you can start by reviewing FAR Part 42 (Contract Administration and Audit Services). Regarding the connection of profit to task— unlike a T&M contract where each labor hour is burdened with a certain amount of profit, fee under a CPFF contract is fixed and not directly tied to actual performance. However, FAR 16.306(a) allows for renegotiation of the fixed fee if the scope of the work changes during contract performance.

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