Deferral of unsold additional fees means the process of transferring the additional unearned fees that the contractor may have earned from an evaluation period to a subsequent evaluation period, giving them an additional opportunity to earn those previously unearned premium fees. (iii) A procurement contract under multiple government procurement and supply contracts shall follow the procedures set out in paragraph 16.505(b)(2). (1) Any contract containing a basic agreement shall contain a range of services and prices, delivery and other appropriate conditions that apply to the respective contract. The basic agreement is incorporated into the contract by special reference (including the reference to any amendment) or by annex. (1) For proposed contracts that exceed the simplified acquisition threshold but do not exceed $750,000, the client`s certificate attesting that the justification is correct and complete to the best of the client`s knowledge and belief with respect to the order activity will serve as an approval, unless a higher level of approval is established in accordance with the Agency`s procedures. Time and materials (T&M) contracts allow government officials to purchase supplies or services on the basis of: 16.202-1 description. A fixed-price contract provides for a price that cannot be adjusted based on the contractor`s experience with costs in performing the contract. This type of contract represents for the contractor the maximum risk and full responsibility for all costs and the resulting profit or loss. It provides maximum incentives for the contractor to control costs and operate efficiently and imposes a minimal administrative burden on the parties. The procuring entity may use a fixed-price procurement in conjunction with an additional incentive (see 16.404) and performance or delivery incentives (see 16.402-2 and 16.402-3) if the surcharge or incentive is based solely on factors other than cost. The type of contract remains a fixed price when used with these incentives. 16.202-2 Request. A fixed-price procurement contract is suitable for the acquisition of commercial goods (see Parts 2 and 12) or the purchase of other supplies or services on the basis of sufficiently precise functional or detailed specifications (see Part 11), if the procuring entity can set fair and reasonable prices from the outset, (e.B.
(a) where there is reasonable price competition; (b) there are reasonable price comparisons with previous purchases of identical or similar supplies or services made on a competitive basis or supported by valid certified cost or price data; (c) the available information on costs or prices makes it possible to estimate realistically the expected cost of performance; or (d) performance uncertainties can be identified and reasonable estimates of their impact on costs can be made, and the Contractor is prepared to accept a fixed price that constitutes the assumption of the associated risks. (a) Description. A fixed-price incentive contract (fixed target) specifies a cost target, a target profit, a price cap (but not a profit cap or floor), and a profit adjustment formula. These elements are all negotiated at the beginning. The price cap is the maximum amount that can be paid to the contractor, with the exception of adjustments based on other contractual clauses. When the contractor completes the service, the parties negotiate the final costs and the final price is determined by applying the formula. If the final cost is less than the target cost, the application of the formula gives a final gain greater than the target gain; Conversely, if the final cost is higher than the target cost, the application of the formula results in a final gain below the target gain, or even a net loss. If the negotiated final costs exceed the price cap, the contractor will consider the difference as a loss. Since profit varies inversely with costs, this type of contract provides a positive and calculable incentive for profit for the entrepreneur to control costs. (a) Description. The Cost Plus incentive fee contract is a reimbursement contract that provides that the fees originally negotiated are then adjusted according to a formula based on the ratio of the total eligible costs to the total target cost.
This type of contract specifies a target cost, target fees, minimum and maximum fees, and a fee adjustment formula. After the execution of the contract, the fees to be paid to the contractor will be determined according to the formula. The formula provides for fee increases above the target royalty within limits if the total eligible costs are below the target costs and a reduction in the fee below the target royalty if the total eligible costs exceed the target costs. This increase or decrease is intended to encourage the contractor to effectively manage the contract. If the total eligible costs are above or below the cost range within which the fee adjustment formula is applied, the Contractor shall receive the total eligible costs plus the minimum or maximum fee. (d) Filling and execution forms. .