Descoping FFP and impacts to revenue
Started by CHILINVLN · Dec 9, 2020 · 3 replies
- COriginal post
CHILINVLN
Dec 9, 2020 · 5y ago
Interested to know thoughts on this. We have a FFP contract with 7 FTEs in place providing labor support to a mailroom. CO states they want to descope the contract down to 4 FTE's halfway into our option year, but hopes to increase back up to 7 on the next option period due to COVID. Question is, since this is FFP, what approach can I take to minimize reduced revenue, if any? We bid this very lean with the anticipation of the overall profit being spread over the entire option period and labor set. Cutting the resourcing from 7 down to 4 halfway into the option period on a FFP contract completely changes those profit projections significantly.
Can we push back? Any thoughts or questions we should/can ask?
- D
Don Mansfield
Dec 9, 2020 · 5y ago
If by "descope" they mean partially terminate for convenience, then there should be a termination for convenience clause in your contract that provides for a settlement. You won't be able to recover anticipatory profits, though.
- R
Retreadfed
Dec 9, 2020 · 5y ago
Agree with Don. Also, since the termination would be partial, and assuming that the contract is not for commercial items, you should be able to reprice the remaining portion of the contract to account for the impact of the termination.
- h
here_2_help
Dec 9, 2020 · 5y ago
Descope of 3/7 FTE workforce for 6 months. FTEs provide mailroom support. 3 FTEs for 6 months = 1.5 FTEs.
May be cheaper to keep the contract going rather than process the TSP...