Hybrid Contract

Sure, you may have a contract with some FFP CLINs and some LH CLINs.  It is not illegal.  

Whether it makes good business sense is another matter.  In some situations, it could.  In other situations, it won’t.  But this doesn’t make it illegal   

A mixed arrangement could provide for difficulties during contract administration, such as when work that should be under the FFP CLINs is charged against the LH CLINs.  But this doesn’t make it illegal.

litai said:

Can you have a hybrid contract that is it is titled as a FIRM FIXED PRICE but some of the CLINS are on labor hours?  Kindly advise where I can find information in the FAR regarding this topic.

16.104 -- Factors in Selecting Contract Types.

There are many factors that the contracting officer should consider in selecting and negotiating the contract type. They include the following:

 (e) Combining contract types. If the entire contract cannot be firm-fixed-price, the contracting officer shall consider whether or not a portion of the contract can be established on a firm-fixed-price basis.

ji20874 said:

A mixed arrangement could provide for difficulties during contract administration, such as when work that should be under the FFP CLINs is charged against the LH CLINs.  But this doesn’t make it illegal.

Other examples of difficulty in administration include specifying which terms and conditions apply to each contract type. Some terms may be the same for both types and some may be different or not applicable. The timing of payments for example. Labor hourly rates are typically payable after performance every couple of weeks. The delivery of goods is typically payable when delivered. I personally would not prefer to receive and try to administer a mixed contract type arrangement in a single contract instrument. Instead, if possible, I would prefer the Government negotiate the complete deal and issue two different contract instruments to the contractor that are combined for price consideration.

Ive used some T&M CLINs on FFP construction contracts at two sites that had  the same design and massive, GFE pollution abatement systems. 

 But we added it by bilateral change where the contractor was encountering numerous, interferences in the field as the GFE was brought out of long term storage. The interferences were going to require field rerouting and/or re-work, delay and and disruption if each had to be handled as a change order.

We negotiated a job order system with estimating,  scope, job ordering and management procedures. Developed local forms to use. It worked well.

See FAR 16.102(b).

Retreadfed said:

See FAR 16.102(b).

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16.102 -- Policies.

(a) Contracts resulting from sealed bidding shall be firm-fixed-price contracts or fixed-price contracts with economic price adjustment.

(b) Contracts negotiated under Part 15 may be of any type or combination of types that will promote the Government’s interest, except as restricted in this part (see 10 U.S.C. 2306(a) and 41 U.S.C. 3901). Contract types not described in this regulation shall not be used, except as a deviation under Subpart 1.4.

I didn't cite this because of these words: 

Quote

Contracts negotiated under Part 15 ...

One can establish contracts of different types under other FAR Parts.

Thank you all for your responses.