A -- Higher Bypass Ratio Inlet Development (HIBRID)

In accordance with DFAR clause 252.215-7003, Excessive Pass-through Charges-Identification of Subcontract Effort (Apr 2007) and DFAR clause 252.215-7004, Excessive Pass - Through Charges, shall be included in all contract solicitations.1. Excessive Pass-Through Charges. Any contract resulting from this solicitation may contain the Clause at DFARS 252.215-7004, Excessive Pass-Through Charges (APR 2007) (provided below) which requires the contractor to identify in its proposal the percentage of effort to be performed by the prime contractor and the percentage expected to be performed by each subcontractor. If the contractor intends to subcontract more than 70% of the total cost of work under the contract or task order, then it shall identify the amount of the contractor's indirect costs and profit applicable to the subcontract work, and a description of the value added by the contractor. If any subcontractor intends to subcontract to a lower tier subcontractor more than 70% of the total cost of it's work, then it shall identify the amount of the subcontractor's indirect costs and profit applicable to the lower tier subcontract work, and a description of the value added by the subcontractor. 252.215-7004 EXCESSIVE PASS-THROUGH CHARGES (APR 2007) (a) Definitions. As used in this clause- Excessive pass-through charge, with respect to a Contractor or subcontractor that adds no or negligible value to a contract or subcontract, means a charge to the Government by the Contractor or subcontractor that is for indirect costs or profit on work performed by a subcontractor (other than charges for the costs of managing subcontracts and applicable indirect costs and profit based on such costs). No or negligible value means the Contractor or subcontractor cannot demonstrate to the Contracting Officer that its effort added substantive value to the contract or subcontract in accomplishing the work performed under the contract. (b) General. The Government will not pay excessive pass-through charges. The Contracting Officer shall determine if excessive pass-through charges exist. (c) Performance of work by the Contractor or a subcontractor. (1) If the Contractor changes the amount of subcontract effort identified in its proposal such that it exceeds 70 percent of the total cost of work to be performed under the contract, task order, or delivery order, the Contractor shall provide the Contracting Officer with a description of the value added by the contractor as related to the subcontract effort. (2) If any subcontractor identified in the proposal changes the amount of lower-tier subcontractor effort such that it exceeds 70 percent of the total of the work to be performed under its subcontract, the Contractor shall provide the Contracting Officer with a description of the value added by the subcontractor as related to the work to be performed by the lower-tier subcontractor(s). (3) If any subcontractor not identified in the proposal subcontracts to a lower-tier subcontractor more that 70 percent of the total cost of work to be performed under its subcontract, the Contractor shall provide the Contracting Officer with a description of the value added by the subcontractor as related to the work to be performed by the lower-tier subcontractor(s). (d) Recovery of excessive pass-through charges. If the Contracting Officer determines that excessive pass-through charges exist- (1) For fixed-price contracts, the Government shall be entitled to a price reduction for the amount of excessive pass-through charges included in the contract price; and (2) for other than fixed-price contracts, the excessive pass-through charges are unallowable in accordance with the provisions in subpart 31.2 of the Federal Acquisition Regulation (FAR) and Subpart 231.2 of the Defense FAR Supplement. (e) Access to records. (1) The Contracting Officer, or authorized representative, shall have the right to examine and audit all the Contractor?s records (as defined at FAR 52.215-2(a)) necessary to determine whether the Contractor proposed, billed, or claimed excessive pass-through charges. (2) For those subcontracts to which paragraph (f) of this clause applies, the Contracting Officer, or authorized representative, shall have the right to examine and audit all the subcontractor?s records (as defined at FAR 52.215-2(a)) necessary to determine whether the subcontractor proposed, billed, or claimed excessive pass-through charges. (f) Flowdown. The Contractor shall insert the substance of this clause, including this paragraph (f), in all subcontracts under this contract, except for- (1) Firm-fixed-price subcontracts awarded on the basis of adequate price competition; (2) Fixed-priced subcontracts with economic price adjustment, awarded on the basis of adequate price competition; (3) Firm-fixed-price subcontracts for the acquisition of a commercial item; or (4) Fixed-price subcontracts with economic price adjustment, for the acquisition of a commercial item. (End of clause)