What should you do if a proposed fee exceeds statutory limitations?

When a proposed fee exceeds statutory limitations, it is essential to adhere to regulatory guidelines while maintaining a fair and equitable process. The correct approach in this scenario is negotiating a fair and reasonable rate within the established limitations.

This approach is grounded in the principle that while the contractor may initially propose a fee above statutory caps, there is still an opportunity for the contracting officer to engage in discussions. By negotiating, the contracting officer can work with the contractor to arrive at a fee that complies with statutory requirements and reflects the value of the service or product being procured. This process ensures that taxpayers are protected from excessive charges while still allowing the contractor to be compensated fairly for their work.

Accepting the fee as proposed disregards legal limits and could lead to non-compliance with federal regulations. On the other hand, outright rejection of the proposal without attempting to negotiate may eliminate a potentially beneficial partnership and hinder the mission-related objectives of the contract. Consulting the contractor's previous contracts can provide insight into their pricing history, but it does not directly address the need to align the proposed fee with current statutory limitations. Thus, negotiation within the framework of the law is the most prudent course of action.