Fixed Price Level of Effort Contract Type

A fixed-price contract with prospective price revaluation may be used for the purchase of production volumes or services for which it is possible to negotiate a fair and reasonable fixed price for an initial period, but not for subsequent periods of contract performance. (e) combination of contract types. Where the contract as a whole cannot be a fixed price, the contractor shall verify whether part of the contract can be fixed on the basis of a fixed price. 16.301-1 Description. The types of reimbursement of contracts provide for the payment of eligible costs incurred to the extent prescribed in the contract. Such contracts shall specify an estimate of the total cost for the purposes of the budgetary commitment and the setting of a ceiling which the contractor may not exceed (except at its own risk) without the agreement of the contracting entity. 16.301-2 Application. (a) The client uses reimbursement agreements only if (1) circumstances do not allow the Agency to define its requirements to the extent that they permit a fixed-price contract (see 7.105); or (2) the uncertainties associated with the performance of the contract do not allow the cost to be estimated with sufficient accuracy to use any type of fixed-price contract. (b) The contracting authority shall document the reasons for the choice of the type of procurement in the written plan of procurement and ensure that the plan is approved and signed at least one level higher than that of the contracting authority (see 7.103 (j) and 7.105).

16.301-3 Restrictions. (a) A repayment agreement may only be used if (1) the factors set out in Article 16.104 have been considered; (2) a written procurement plan has been approved and signed at least one level higher than that of the procuring entity; (3) the contractor`s accounting system is appropriate for determining the costs applicable to the contract or contract; and (4) prior to the award of the contract or contract, sufficient government resources are available to award and manage a contract other than a fixed price (see 7.104(e)). This includes adequate government oversight during implementation in accordance with 1.602-2 to provide reasonable assurance that efficient methods and effective cost controls are applied. (b) The use of reimbursement contracts for the acquisition of commercial property is prohibited (see sections 2 and 12). 2. On the basis of the contracting entity`s knowledge of the market, more favourable conditions, including price fixing, shall be granted when a single invitation to tender is made; (d) Contract Schedule. The procuring entity shall specify in the procurement plan the indicative cost, profit and target price for each element subject to a change in the incentive price. (ii) the requirement shall apply to semi-standard deliveries where prices may be proportional to the prices of standard supplies of almost equivalent value for which a list price or a fixed market price is fixed. (a) The choice of the type of contract is generally a matter of negotiation and requires sound judgment. Contract type negotiation and price negotiation are closely related and must be considered together. The objective is to negotiate a type of contract and price (or estimated costs and fees) that result in a reasonable risk to the contractor and that provide the greatest incentive for the contractor to perform efficiently and economically. (d) The maximum government liability inserted in clause 52.216-24, Limitation of Crown Liability, is the estimated amount required to meet the contractor`s pre-definition funding requirements.

However, it may not exceed 50 % of the estimated cost of the final contract, except with the prior agreement of the official who approved the contract. h) See 10.001(d) for insertion of clause in 52.210-1, Market Research, if the contract is for $6 million for the purchase of non-commercial items. (1) Fixed price adjustments. These price adjustments are based on increases or decreases from an agreed level of published or otherwise fixed prices of certain items or final contractual headings. Unearned Reward Fee Deferral means the process of transferring unearned Reward Fees that the Contractor may have earned from an evaluation period to a subsequent evaluation period, thereby giving the Contractor an additional opportunity to earn those previously unearned Reward Fees. (ii) the need for supplies or services is imperative and exceptionally urgent (i.e. whether the government would suffer financial or other harm if the need was not met earlier than would be possible if prices were set before work began). The customer will set the price as soon as possible.

Under no circumstances will an entire order be charged retroactively. Reimbursable contracts: This type is a good option when requirements or the ability to meet requirements are uncertain. In the case of Howard Hughes and the MoHo project, it was not clear that the task the government had given him could even be accomplished, a perfect example of the use of reimbursable contracts. It is also reasonable that we are sure that something can be completed, but we are not sure of the cost. If costs cannot be predicted with certainty, a typical contract is appropriate. A cost-plus contract is a reimbursement contract that provides for a fee consisting of (a) a base amount (which may be zero) determined at the beginning of the contract and (b) an additional amount based on a government assessment sufficient to motivate excellence in contract performance. Cost-plus contracts are discussed in subsection 16.4, Incentive Contracts. See Article 16.401(e) for a more detailed description and analysis of the operation of these treaties. See 16.301-3 and 16.401(e)(5) for restrictions. (i) See paragraph 7.107-6 on the use of 52.207-6, Solicitation of tenders from small enterprises and partnership agreements or small enterprise joint ventures (multiple award contracts) in tenders for multiple contracts above the Agency`s substantial consolidation threshold.