52.216-30 Time-and-Materials/Labor-Hour Proposal Requirements—Other Than Commercial Acquisition Without Adequate Price Competition
Source: FAR 52.216-30 on acquisition.gov
Offerors must provide detailed fixed hourly rates for all labor categories and entities involved, following strict rules on profit and exceptions for commercial services in T&M/Labor-Hour proposals without adequate price competition.
Overview
FAR 52.216-30 outlines proposal requirements for Time-and-Materials (T&M) and Labor-Hour contracts in non-commercial acquisitions where there is not adequate price competition. This provision requires offerors to submit detailed fixed hourly rates for each labor category, covering not only their own employees but also those of subcontractors and affiliated entities. The regulation also specifies how profit should be handled in interorganizational transfers and provides an exception for services that qualify as commercial under FAR 2.101.
Key Rules
- Proposal of Fixed Hourly Rates
- Offerors must propose separate fixed hourly rates for each labor category, including wages, overhead, G&A, and profit, for themselves, subcontractors, and affiliates.
- Profit Restrictions on Interorganizational Transfers
- For services transferred between divisions, subsidiaries, or affiliates under common control, profit cannot be included for the transferring organization, but may be included for the prime contractor.
- Exception for Commercial Services
- If the transferred service meets the FAR 2.101 definition of “commercial service,” established catalog or market rates may be used if it is standard practice to price such transfers at other than cost.
Responsibilities
- Contracting Officers: Ensure proposals comply with these requirements and verify the correct application of profit and rate exceptions.
- Contractors: Prepare and submit detailed rate proposals as specified, and apply profit rules correctly for interorganizational transfers.
- Agencies: Oversee compliance and review submitted rates for accuracy and adherence to FAR requirements.
Practical Implications
- This provision ensures transparency and consistency in pricing for T&M and Labor-Hour contracts where price competition is lacking.
- Contractors must carefully document and justify their proposed rates, especially for interorganizational transfers.
- Common pitfalls include misapplying profit rules or failing to distinguish between commercial and non-commercial services in rate proposals.
As prescribed in 16.601(f)(2), insert the following provision:
Time-and-Materials/Labor-Hour Proposal Requirements—Other Than Commercial Acquisition Without Adequate Price Competition (Nov 2021)
(a) The Government contemplates award of a Time-and-Materials or Labor-Hour type of contract resulting from this solicitation.
(b) The offeror must specify separate fixed hourly rates in its offer that include wages, overhead, general and administrative expenses, and profit for each category of labor to be performed by-
(1) The offeror;
(2) Each subcontractor; and
(3) Each division, subsidiary, or affiliate of the offeror under a common control.
(c) Unless exempt under paragraph (d) of this provision, the fixed hourly rates for services transferred between divisions, subsidiaries, or affiliates of the offeror under a common control-
(1) Shall not include profit for the transferring organization; but
(2) May include profit for the prime Contractor.
(d) The fixed hourly rates for services that meet the definition of “commercial service” at Federal Acquisition Regulation 2.101 that are transferred between divisions, subsidiaries, or affiliates of the offeror under a common control may be the established catalog or market rate when it is the established practice of the transferring organization to price interorganizational transfers at other than cost for commercial work of the offeror or any division, subsidiary or affiliate of the offeror under a common control.
(End of provision)