Feds seek comments on time-and-materials and labor-hour contracts

Federal officials are asking for comments on how time-and-materials and labor-hour contracts are used to buy commercial products and how the contract types could be used to buy commercial services.

The comments will be used to draft a new federal rule for the use of the two contract types for buying commercial services, according to a Sept. 20 notice published in the Federal Register by the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council.

According to the councils, current government policies for buying commercial services were designed only for fixed-price contracts. IT executives say they like to use time-and-materials contracts on system development jobs when it is not possible before beginning work to determine the extent or duration of the job.

The new rule will allow the use of time-and-materials and labor-hour contracts for commercial services under certain conditions, including:

* The contract must be competed

* The contracting officer must find that no other contract type is suitable

* The contracting officer must include a ceiling price that the contractor exceeds at its own risk.

According to the Federal Register notice, the councils seek comment on other issues, including:

* What commercial services are sold to the public predominantly, and also, rarely, through time-and-materials or labor-hour contracts

* What types of commercial services are commonly sold to the public through the use of time-and-materials or labor-hour contracts, and on a fixed-price basis

* What conditions typically exist when services are sold to the public through time-and-materials or labor-hour contracts?

Comments are due by Nov. 19. They should be identified by ANPR, FAR case 2003-027, and submitted at www.regulations.gov.

A public meeting will be held Oct. 19 from 10 a.m. to 4:30 p.m. at the General Services Administration building auditorium, 1800 F St. NW, Washington. Participants can go to www.acq.osd.mil/dpap/dars/coming.htm to submit by Oct. 1, comments on topics they would like to see addressed at the meeting.