ISC 2.0 Draft Labor Rate Adjustment H Clause.docx

DETERMINATION AND FINDINGS

AFMC MP 5301.304-91 Approval of new nonstandard clauses not published in FAR/DFARS/AFFARS

SOLICITATION/CONTRACT NUMBER: FA8207-20-R-0003

CLAUSE TITLE: Labor Rate Adjustment Clause DATE: 12 June 2020

CATEGORY:

A. X One-time Use B. Multiple/Repetitive Use

Uniform Contract Format Section: H Applicable FAR Part/Subject Area: 15.4 Contracting Officer’s Name: Kyle Chase Phone # (801) 777-0128

Rationale for Determination of Category: The suggested clause language is unique and will apply to the Integration Support Contract (ISC) 2.0.

JUSTIFICATION: The inclusion of this clause serves the purpose of explaining the Government’s method for collecting and evaluating the contracted labor rates and allowing for the possibility of rate adjustment, on a periodic basis, to ensure fair and reasonable compensation is provided to the contractors. If this clause were not included in the ISC 2.0 contract, the Government would not have the ability to systematically make adjustments to contractually agreed upon rates.

DETERMINATION:

The undersigned Contracting Officer has determined that the attached clause does not duplicate or deviate from the FAR/DFARS/AFFARS, does not constitute a “significant revision” as defined at FAR 1.501-1 and DFARS PGI 201.301(b), and is necessary for use in the subject contractual document.

Attachment:

Full Text of Clause

AFMC LOCAL CLAUSE CONTROL TEMPLATE FULL TEXT OF CLAUSE

SOLICITATION/CONTRACT NUMBER: FA8207-20-R-0003

CLAUSE TITLE: LABOR RATE ADJUSTMENT CLAUSE

DATE: 06/12/2020

FULL TEXT OF CLAUSE:

H002 Labor Rate Adjustment Clause

The prime contractor (including any strategic business unit and interdivisional organization of the prime contractor performing work on this contract in any amount and/or any subcontractor performing work on this contract equal to or exceeding the Certified Cost and Pricing Threshold) shall submit actual and projected labor rate cost data in accordance with this clause to the Contracting Officer at the end of the 4th year of the Base Period and the 4th year of each Option Period (OP) 1 and OP 2. At the end of the 4th year of OP 2, the rates will be reviewed IAW the procedures used for the previous OPs and applied to OP 3 through 5 at the Government’s discretion. The prime contractor (including any strategic business unit and interdivisional organization of the prime contractor performing work on this contract in any amount and/or any subcontractor performing work on this contract equal to or exceeding the Certified Cost and Pricing Threshold), shall submit actual and projected labor rate cost data.

The prime contractor’s actual and projected labor rate cost data submission shall include an updated Labor Rate Matrix including the prime contractor’s actual labor rates used during the prime contractor’s performance of the prior four years of the contract and the prime contractor’s projected labor rates for the next OP(s). The prime contractor shall include all supporting data for the actual and projected rates. Subcontractors, strategic business units, and interdivisional organizations of the prime contractor performing work on this contract shall submit this same data, in the same or similar format, and may submit it directly to the Contracting Officer. As part of the actual and projected labor rate cost data submission provided to the Contracting Officer at the end of OP 1, the prime contractor, subcontractors and strategic business units and interdivisional organizations of the prime contractor performing work on this contract shall include projected rates for the following OP (OP 3, 4, and 5 will be submitted at the end of the 4th year of OP 2). Prior to exercising OP 1 and 2 of this contract, the Government will review the prime contractor data submissions and compare them with the Labor Rate Matrix on contract at that time. The Government will compare the subcontractor, prime contractor strategic business unit, and/or interdivisional organization data submissions with the rates that the subcontractor, prime contractor strategic business unit, and/or interdivisional organization. If the prime contractor’s actual or projected cost or fixed-price data is outside five percent (5%) of the Labor Rate Matrix for a given labor category, the Government may, by unilateral contract modification, make an adjustment (up or down) to the labor rate in the Labor Rate Matrix for the future OP(s).

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