Changes in indirect rates
Started by faroutgeek · Jul 14, 2021 · 2 replies
- fOriginal post
faroutgeek
Jul 14, 2021 · 4y ago
I awarded a CPFF contract in February this year. We are in the process of adding optional requirements to the contract and the contractor submitted a proposal with higher indirect rates. The contractor stated that their indirect rates change in June every year and as a result are want to apply the new indirect rates for the optional work which have been approved by DCAA. Additionally, the contractor wants to change the indirect rates for all the labor categories awarded in February as well. Since the indirect rates are higher this is going to cost the Government more. 1) Am I allowed to accept the new indirect rates for the labor categories initially awarded on the contract? 2) If I accept the new indirect rates for the optional work, will I have 2 sets of indirect rates for the rest of the POP?
- V
Vern Edwards
Jul 14, 2021 · 4y ago
You say it's a cost-plus-fixed-fee (CPFF) contract. That being the case, the government will have to reimburse the contractor at its actual, allowable indirect cost rates, unless the contract includes rate ceilings ("caps").
That is pretty elementary. Try reading the contract. Start with the Allowable Cost and Payment clause, FAR 52.216-7.
- j
ji20874
Jul 14, 2021 · 4y ago
And, it is better to know sooner rather than later.