Anticipated Use of Overtime in CPFF Contract

Why bother with a separate CLIN for overtime? It's a cost-reimbursement contract. Why not just follow the procedures in FAR 22.103-4 and reimburse the contractor as as requested, as necessary and allowable, and as approved? If you want to give non-incumbents and estimate of overtime, then do it in the proposal preparation instructions.

I, too, prefer Option #2, and see no benefit to Option #1.

Thanks Vern and Navy - the only reason Option #1 comes into play is due to our local procedures. In our Acquisition Guide it states that In Level of Effort (LOE) contracts including overtime premium at Government expense, contracting officers shall establish a separate level of effort for the overtime hours. Where that guidance comes from has me scratching my head, as I see nothing in FAR, DFARS, or NMCARS that mentions anything similar.

1. I prefer to leave the burden on the contractor to justify paying OT premium, and not to pre-ordain its use/necessity.

2. If you have a requirement that is truly performance-based, why do you need to specify a level of effort?

3. The fact that you've found nothing in FAR, DFARS, or NMCARS that mentions anything about establishing a separate level-of-effort for OT suggests that this practice may be unique to your activity. Have you checked with your policy office?

1. We specify, because ultimately I am buying hours. There is no overall SOW completion objective, other than we need to buy personnel to work on tasking as instructed by technical instructions. While we look for an innovative/different approach in performance and staffing methods, we still want to procure "x" number of hours over 3 or 5 years.

2. I believe the policy document to be outdated, as the reference is made to NAPS in lieu of NMCARS. Based on that I plan to document the file and use my best judgement in application of actual policy.

Thanks again for your thoughts.

Here's a thought: YOU'RE NOT BUYING HOURS!

I am sick of contracting practitioners using that damned phrase. You're buying work. Repair work, right? And don't you expect expect that work to be done to specified standards of quality? Hours are a unit of work measurement and payment, true. (Apparently, you and your colleagues in the Navy don't care if they complete any repairs.) But they are hours doing specified work to specified standards. (I hope.)

Can the contractor's personnel sit around for an hour doing nothing, charging hours to the contract, and the contractor still get its costs reimbursed and paid fee? If so, then you and your colleagues should be fired and consigned to perdition. If not, then you're not buying hours.

Vern,

Chill . . . 1102skier is just using shorthand, saying "hours" for "hours of work." And in the original post it says they've got a requirement that is performance-based, so your comment ("Apparently, you and your colleagues in the Navy don't care if they complete any repairs.") seems like a pretty cheap shot.

Enough with the talk of firing and consignment to perdition already.

Vern - Not sure how my appreciation of your thoughts turned into a pink slip and perdition, but I'll take the high ground.

Thanks again Navy.

Navy and 1102skier:

I saw the comment in the opening post about peformance-based, and I ignored it. Performance-based and LOE don't mix. There's no such thing as a performance-based level-of-effort contract. The concepts are inconsistent.

And using an LOE term contract to buy repairs strikes me as not caring about the results of the repair work. Why else would you use LOE instead of completion?

As for being fired and consigned to perdition, read what I wrote. If you're not paying people for doing nothing you have nothing to worry about.

I understand the frustration -- it sounds like 1102skier is not buying work, but really is buying hours -- apparently, yes, the contractor's personnel can sit around doing nothing for an hour and the Government will pay the contractor cost and fee; and this because he's buying hours, not work.

Navy and 1102skier:

...Performance-based and LOE don't mix. There's no such thing as a performance-based level-of-effort contract. The concepts are inconsistent...

And using an LOE term contract to buy repairs strikes me as not caring about the results of the repair work. Why else would you use LOE instead of completion?...

I agree with Vern here.

I agree with Vern here.

On the point that there's no such thing as a performance-based level-of-effort contract, I agree with Vern, too. In this case, I was merely observing that the OP had said the requirement was described in performance-based terms, notwithstanding that the contract would be LOE, and anyone's implication that a contractor could sit around doing nothing for an hour and the Government would pay the contractor cost and fee is ludicrous. To suggest that tells me the person hasn't read, or is ignoring, FAR 52.216-7 and/or FAR 31.205-6 regarding allowable costs.

On the point that there's no such thing as a performance-based level-of-effort contract, I agree with Vern, too. In this case, I was merely observing that the OP had said the requirement was described in performance-based terms, notwithstanding that the contract would be LOE, and anyone's implication that a contractor could sit around doing nothing for an hour and the Government would pay the contractor cost and fee is ludicrous. To suggest that tells me the person hasn't read, or is ignoring, FAR 52.216-7 and/or FAR 31.205-6 regarding allowable costs.

Navy, that is MUCH easier said than done. It implies that the Government has a strong contract management team who can recognize less than reasonably full productive effort, who will immediately react to less than fully productive efforts by contract workers, who will document every such instance, who are backed up by the KO, who will take immediate steps to inform the Contractor that its costs are unreasonable, thus not allowable, etc., etc. Totally unrealistic expectations from my viewpoint.

Even if the Contractor isnt intentionally slacking, the culture of LOE vs. performance based FP, PB-CPIF or some variant thereof provides for different management styles. Performance based requirements provide incentives to find better ways to accomplish tasks, thus rewarding the company financially for saving money while meeting the customer's performance expectations. I think many of those type movtivators are lacking in LOE type arrangements.

Navy, that is MUCH easier said than done. It implies that the Government has a strong contract management team who can recognize less than reasonably full productive effort, who will immediately react to less than fully productive efforts by contract workers, who will document every such instance, who are backed up by the KO, who will take immediate steps to inform the Contractor that its costs are unreasonable, thus not allowable, etc., etc. Totally unrealistic expectations from my viewpoint.

Joel - I interpret your comment as saying that it's unrealistic to expect contractors to perform responsibly and the government to administer adequately a cost-reimbursement contract. I respectfully disagree. Cost-reimbursement contracts abound, and I have not seen one in which contractors get paid for sitting around not performing.

Even if the Contractor isnt intentionally slacking, the culture of LOE vs. performance based FP or some variant thereof provides for different management styles. Performance based requirements provide incentives to find better ways to accomplish tasks, thus rewarding the company financially for saving money while meeting the customer's performance expectations. I think many of those type movtivators are lacking in LOE type arrangements.

Philosophically, I think we're in agreement, as I initially noted in my Post #13 - there's no such thing as a performance-based level-of-effort contract.

Joel - I interpret your comment as saying that it's unrealistic to expect contractors to perform responsibly and the government to administer adequately a cost-reimbursement contract. I respectfully disagree. Cost-reimbursement contracts abound, and I have not seen one in which contractors get paid for sitting around not performing.

Navy:

I understand that you said that you have not seen any such contract. But are you saying that it has not happened that contractors have been paid under a CR contract for doing nothing? Are you really saying that? Contractors have been reimbursed for billions of dollars just for workers awaiting security clearances.

Let me add that this has gotten off track, and it's my fault. My comment about paying people for doing nothing was rhetorical. I did not mean that I thought 1102skier and his colleagues were doing that. I don't think they were. The point was that I did not think they were doing that, and so the phrase "buying hours" was inappropriate. I was frustrated, as ji20874 has said, and lost it.

I apologize.

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