contractor100

USAID regs require grantees to notify USAID OSDBU 45 days before making purchases, so that USAID can satisfy a statutory obligation to increase US small businesses' access to these opportunities. The reference is below, with the difficult language in bold. What does "small business threshold" mean and how much is it? Later in this reg, at 22 CFR 226.44(e)(2), in another context, USAID refers to "the small business threshold fixed at 41 USC 403(11)." That would be the SAT, correct, "small business threshold" in 41 USC 403(11) was changed to "simplified acquisition threshold"? So the threshold is $100,000, until USAID changes to $150,000 in this reg? Or is it $100,000? Why do many people think it is $25,000? Any help much appreciated. 22 CFR 226.44 ( Positive efforts shall be made by recipients to utilize small businesses, minority-owned firms, and women's business enterprises, whenever possible. Recipients of USAID awards shall take all of the following steps to further this goal. (1) Ensure that small businesses, minority-owned firms, and women's business enterprises are used to the fullest extent practicable. (2) Make information on forthcoming opportunities available and arrange time frames for purchases and contracts to encourage and facilitate participation by small businesses, minority-owned firms, and women's business enterprises. To permit USAID, in accordance with the small business provisions of the Foreign Assistance Act of 1961, as amended, to give United States small business firms an opportunity to participate in supplying commodities and services procured under the award, the recipient shall to the maximum extent possible provide the following information to the Office of Small Disadvantaged Business Utilization (OSDBU/MRC), USAID Washington, DC 20523, at least 45 days prior to placing any order or contract in excess of the small purchase threshold: (i) Brief general description and quantity of goods or services; <a name="b_2_ii">(ii) Closing date for receiving quotations, proposals or bids; and (iii) Address where solicitations or specifications can be obtained.

From today's WaPo. Possibly Burton was misquoted? It is this general perception of bad faith that feeds the protest bar, though. "Federal agencies awarded $115.2 billion in no-bid contracts in fiscal year 2012, an 8.9 increase from $105.8 billion from 2009, according to government data. The jump unfolded even as total contract spending decreased by about 5 percent. Lockheed Martin, Boeing and Raytheon were top recipients of sole-source contracts. Those top Pentagon vendors and other large contractors can draw on established relationships with procurement officers to claim a greater share of non-competitive work, said Robert Burton, former acting administrator of the Office of Federal Procurement Policy under George W. Bush."

Just as a footnote, I don't believe your size status is determined as of the date your subcontract was executed. It is the date you certified you were small for the IDIQ, presumably the date of your proposal to the prime. Parallel to the general rule that an offeror's size is determined when they submit the proposal, not when they are awarded the contract. 13 CFR 121.404(e) For subcontracting purposes, a concern must qualify as small as of the date that it certifies that it is small for the subcontract. The applicable size standard is that which is set forth in § 121.410 and which is in effect at the time the concern self-certifies that it is small for the subcontract So presumably you could certfy in your proposal for an IDIQ, then receive a subcontract years later. In 2006, when the rules on recertifying for prime contracts came out, SBA said it might reconsider this rule, I don't know if anyone knows whether they have. See https://interact.gsa.gov/sites/default/files/sba_no_8a_credit_on_sched1.pdf Given that a prime can rely on the subcontractor's self certification for most of the socioeconomic categories, I have always wondered why primes ask subs to recertify.

Please see AIDAR722.170, copied below for convenience. Here is the question: Is a USAID contractor limited in what it can pay subcontractors, hired abroad, by sections (a) and ( of AIDAR722.170, or do those sections only apply to the USAID contractor's employees A Some argue sections (a) and ( B ) apply to any person "hired abroad for work in a cooperating country &c" and therefore apply to subcontractors' employees. Note that sections (d ) and (e) refer to "employees" and sections (a) and ( B ) do not. B Some argue the clause only applies to contractor's employees. because 1 there is no explicit requirement to flow the clause down and 2 "USAID-direct contracts" in clause (a) refers to the prime USAID contract and thus excludes subcontracts under USAID contracts. Some say, however, that "USAID-direct contracts" in this context, means USAID direct contracts as opposed to host country contracts, see ADS 301.3.1.1 copied below for convenience. 301.3.1.1 Distinction Between USAID-Direct Contracts and Host Country Contracts Effective Date: 08/18/1997 Mission Directors and staff must bear clearly in mind the distinction between USAID-direct and host country contracts. USAID-direct contracts follow the Federal Acquisition Regulation (and AID Acquisition Regulation) and maximize USAID control over the activity in question. When USAID decides to use host country contracting procedures, on the other hand, it acts as a financier and not a contracting party, reserving certain rights of approval and activity monitoring. [b 722.170 Employment of third country nationals (TCN’s) and cooperating country nationals (CCN’s). (a) General. It is USAID policy that cooperating country nationals (CCN’s) and third country nationals (TCN’s), who are hired abroad for work in a cooperating country under USAID-direct contracts, generally be extended the same benefits, and be subject to the same restrictions as TCN’s and CCN’s employed as direct hires by the USAID Mission. Exceptions to this policy may be granted either by the Mission Director or the Assistant Administrator having program responsibility for the project. (TCN’s and CCN’s who are hired to work in the United States shall be extended benefits and subject to restrictions on the same basis as U.S. citizens who work in the United States.) ( Compensation. Compensation, including merit or promotion increases paid to TCN’s and CCN’s may not, without the approval of the Mission Director or the Assistant Administrator having program responsibility for the project, exceed the prevailing compensation paid to personnel performing comparable work in the cooperating country as determined by the USAID Mission. Unless otherwise authorized by the Mission Director or the Assistant Administrator having program responsibility for the project, the compensation of such TCN and CCN employees shall be paid in the currency of the cooperating country. © Allowances and differentials. TCN’s and CCN’s, hired abroad for work in a cooperating country, are not eligible for allowances or differentials under USAID-direct contracts, unless authorized by the Mission Director or the Assistant Administrator having program responsibility for the project. (d) Country and security clearances. The contractor shall insure that the necessary clearances, including security clearances, if required, have been obtained for TCN and CCN employees in accordance with any such requirements set forth in the contract or required by the USAID Mission, prior to the TCN or CCN starting work under the contract. (e) Physical fitness. Contractors are required to insure that prospective TCN and CCN employees are examined prior to employment to determine whether the prospective employee meets the minimum physical requirements of the position and is free from any contagious disease. (f) Workweek, holidays, and leave. The workweek, holidays, and leave for TCN and CCN employees shall be the same as for all other employees of the contractor, under the terms of the contract; however, TCN and CCN employees are not eligible for home leave or military leave unless authorized by the Mission Director or the Assistant Administrator having program responsibility for the project. (g) Travel and transportation for TCN’s and CCN’s. Travel and transportation shall be provided TCN and CCN employees on the same basis as for all other employees of the contractor, under the terms of the contract. (h) Household effects and motor vehicles. USAID will not provide household effects to TCN and CCN employees; such employees may ship their household effects and motor vehicles to their place of employment on the same basis as for all other employees of the contractor, under the terms of the contract unless they are residents of the cooperating country.

Contractor is completing reps and certs in which the government has included 52.215-6 (see below.) The government has specified the place of performance is "Foreign Country" (an actual country is specified.) The government has also specified that contractor may acquire office space for performance of the contract as part of its responsibilities under the contract, or the contractor may perform the services at the contract beneficiaries' location. Contractor has offices in "Foreign Country" and "US HQ." Contractor has shown the office name of "US HQ" in its proposal. Contractor intends to manage provision of the services in the acquired office space from Contractor's offices in HQ and Foreign Country. The above facts are true for ALL of contractor's contracts. 1 Does Contractor have to show the office address in "Foreign Country" in the clause below? 2 When Contractor is filling out this SAM question, is the answer "yes" or "no." Does YOUR COMPANY have other plants/facilities at different addresses routinely used to perform on contracts? (FAR 52.214-14, <a href="https://www.acquisition.gov/far/current/html/52_215.html#wp1144523" target="_blank"> FAR 52.215-6 ) Contractor believes that the answer to both above questions is "no," because the contractor is not actually uisng the HQ or the Foreign Country office to perform the work: the work is simply being directed from that office. 52.215–6 Place of Performance. As prescribed in 15.209(f), insert the following provision: PLACE OF PERFORMANCE (OCT 1997) (a) The offeror or respondent, in the performance of any contract resulting from this solicitation, b intends, b does not intend [ check applicable block] to use one or more plants or facilities located at a different address from the address of the offeror or respondent as indicated in this proposal or response to request for information. ( If the offeror or respondent checks ‘‘intends’’ in paragraph (a) of this provision, it shall insert in the following spaces the required information: Place of Performance Name and Address of Owner and Operator of the Plant or Facility if Other than Offeror or Respondent (Street Address, City, State, County, Zipcode) _______________________________________________________________________________ _______________________________________________________________________________ _______________________________________________________________________________

Dear Carl, . The sense in industry (where I am anyway) is the we hens do not invite the fox in to our house. We are doing everything absolutely on the up and up, but OFCCP audits have a certain reputation. Perhaps an advisory discussion would be less adversarial, though; thanks for the thought.

A contractor has received a contract making it subject to the affirmative action program requirement. Contractor has 120 days to develop the plan. One day later, contractor is asked to make the representation in 55.222-25 below. Does contractor have to check "o has not developed and does not have on file, at each establishment, affirmative action programs required by the rules and regulations of the Secretary of Labor (41 CFR 60–1 and 60–2),"? What are the usual consequences of contractor's checking this box? 52.222-25 Affirmative Action Compliance. As prescribed in 22.810(d), insert the following provision: Affirmative Action Compliance (APR 1984) The offeror represents that (a) it o has developed and has on file, o has not developed and does not have on file, at each establishment, affirmative action programs required by the rules and regulations of the Secretary of Labor (41 CFR 60–1 and 60–2), or ( it o has not previously had contracts subject to the written affirmative action programs requirement of the rules and regulations of the Secretary of Labor.

Sorry, MBrown, just saw this. No, Reseller One is not doing this out of the goodness of ROne's heart, ROne is doing it for money. In this situation Reseller One is paid by Company ABC to offer Company ABC's widgets on One's GSA schedule. ABC does not want to carry its own GSA schedule for the usual reasons. Reseller One also offers ABC an even better deal (for a fee!). When a government agency wants to buy ABCs widgets, the agency can put out an RFQ on ebuy and be positive it will get three bids for ABCs widgets. As to what Two and Three get out of this, see above. ABC's marketing department may then sell this arrangement to potential buyers as a very easy way to buy ABCs widgets.

And if I may quote the US poet John Ashbery: "We all bought tickets to the allusion but nothing happened" You ask a good question, Desparado. What indeed is the incentive for the second and third resellers to add the product to their schedules and even more curious, go to the trouble and expense of putting in a bid? Assume any of these conditions: 1 Cash payment of some kind, passed through from payments from the original manufacturer to Reseller 1 2 Quid pro quo, in that Reseller 1 does the same service for Resellers 2 and 3 with other products 2 Resellers 2 and 3 are actually subsidiaries of Reseller 1 It feels like circumvention of the three bids rule, but if Resellers can absolutely demonstrate lack of collusion on prices, it is hard to say why

Agree!!! Thanks for the advice!

Thanks, I agree, my colleagues assert there Act doesn't apply to the inclusion of such travel in an indirect rate, but I can't find any cite to such an exclusion

Non profit organization, subject to A-122, is 90 percent funded from federal grants. Under the FLy America Act, my indirect employees' travel on a non certified flight be included in computation of the overhead rate. 1. below is the cite from A-122 on travel costs. 2. below is the Fly America Act. Opinions? Thanks all 1. General. Travel costs are the expenses for transportation, lodging, subsistence, and related items incurred by employees who are in travel status on official business of the non-profit organization. Such costs may be charged on an actual cost basis, on a per diem or mileage basis in lieu of actual costs incurred, or on a combination of the two, provided the method used is applied to an entire trip and not to selected days of the trip, and results in charges consistent with those normally allowed in like circumstances in the non-profit organization’s non-federally sponsored activities. Lodging and subsistence. Costs incurred by employees and officers for travel, including costs of lodging, other subsistence, and incidental expenses, shall be considered reasonable and allowable only to the extent such costs do not exceed charges normally allowed by the non-profit organization in its regular operations as the result of the non-profit organization’s written travel policy. In the absence of an acceptable, written non-profit organization policy regarding travel costs, the rates and amounts established under subchapter I of Chapter 57, Title 5, United States Code ("Travel and Subsistence Expenses; Mileage Allowances"), or by the Administrator of General Services, or by the President (or his or her designee) pursuant to any provisions of such subchapter shall apply to travel under Federal awards (48 CFR 31.205-46(a)). Commercial air travel. 2. (a) Transportation by Air Carriers Holding Certificates.— A department, agency, or instrumentality of the United States Government shall take necessary steps to ensure that the transportation of passengers and property by air is provided by an air carrier holding a certificate under section 41102 of this title if— (1)the department, agency, or instrumentality— (2)the transportation is authorized by the certificate or by regulation or exemption of the Secretary of Transportation; and (3)the air carrier is— (A)available, if the transportation is between a place in the United States and a place outside the United States; or ( B )reasonably available, if the transportation is between 2 places outside the United States. (1) Airfare costs in excess of the customary standard commercial airfare (coach or equivalent), Federal Government contract airfare (where authorized and available), or the lowest commercial discount airfare are unallowable except when such accommodations would: (a) require circuitous routing; ( B ) require travel during unreasonable hours; © excessively prolong travel; (d) result in additional costs that would offset the transportation savings; or (e) offer accommodations not reasonably adequate for the traveler’s medical needs. The non-profit organization must justify and document these conditions on a case-by-case basis in order for the use of first-class airfare to be allowable in such cases. (2) Unless a pattern of avoidance is detected, the Federal Government will generally not question a non-profit organization's determinations that customary standard airfare or other discount airfare is unavailable for specific trips if the non-profit organization can demonstrate either of the following: (a) that such airfare was not available in the specific case; or ( B ) that it is the non-profit organization’s overall practice to make routine use of such airfare. Air travel by other than commercial carrier. Costs of travel by non-profit organization-owned, -leased, or -chartered aircraft include the cost of lease, charter, operation (including personnel costs), maintenance, depreciation, insurance, and other related costs. The portion of such costs that exceeds the cost of allowable commercial air travel, as provided for in subparagraph] c., is unallowable. Foreign travel. Direct charges for foreign travel costs are allowable only when the travel has received prior approval of the awarding agency. Each separate foreign trip must receive such approval. For purposes of this provision, "foreign travel" includes any travel outside Canada, Mexico, the United States, and any United States territories and possessions. However, the term "foreign travel" for a non-profit organization located in a foreign country means travel outside that country.

Kathleen, Is it a GSA BPA?

Absolutely define it, I just used 2080 for convenience.

Yes, exactly. If they lock you out, maybe it is interference with contractor's performance? These FFP (Fake Fix Price) contracts really are a mess. All the ones I've seen (15 maybe?) have a CR line item for ODCs, BTW, but none was commercial.

Sorry I wasn't clear. What I am saying is the the CO is constructively issuing a change order, or possible a partial termination, and I would like to issue a claim on either theory. COs: Yes, your LOE in your cost proposal was 20800 hours. But, we don't need that many hours. Bill us and pay for 15000. [numbers illustrative only] C100: But, it is FPLOE, you have to order the whole amount unless you issue a change order. CO's: We suppose if we issue a change order, though, you may make a claim. C100: I might. CO's: Well you can't unless we issue a change order. C100: I say you have issued a change order if you won't pay my invoice for the full 20800 hours &tc, &tc mrsbadexample, If you bid and win, please make sure the LOE is in the contract or that your cost proposal is incorporated into the contract...

Vern, Thanks for the reply. So perhaps a CO asserting a right to "order hours" could issue a change order per 52.243-1 Changes—Fixed-Price, and the contractor could request an EA? Thanks,

Since we are on the topic, something that has always puzzled me: What exactly does the government have to buy in an FFP LOE contract? I don't have statistics, mrsbadexample, but I certainly have seen a lot of agencies issuing FFP LOE contracts to get around a proscription on T&M. Giving an LOE of FTE's, not hours. With a requirement, however, to show hours and rates in the cost proposal. Suppose my cost proposal says I will staff a maintenance shop with 10 FTE's, at 20800 hours per year at a total cost of $500K. I state in my cost proposal that the "specified level of effort is 10 FTE's for one year." Without a contract modification: Can the government "order" fewer than 20800 hours or is the government obligated to order the full amount? If so, can it pay me less than $500K, say, $24 per hour for the hours "ordered"? Several agencies have answered yes to both of the above questions, and that doesn't seem like a reasonable interpretation of an FFP LOE contract to me. I am sure everyone knows what happens to contractor's quoted price when the government does this.

weissmana, 52.219-9(d)(9) might require your primes to require you to submit a subcontracting plan, I expect you have reviewed that?

http://www.c-spanvideo.org/program/305422-1 Government Oversight hearing scheduled for 1:30 this afternoon. If you liked the movie Gladiator, this is for you! Ave atque vale, Administrator.

The prime would be liable to the government, of course, but the prime might've passed that liability down to the sub by subcontract, most prudent primes do!

The prime has to bill the government either for 1 hours of labor, which may only be at the prime's approved GSA rates or the subcontractors' approved GSA rates, if the parties are in a CTA, 52.232-7a(2) or 2 the subcontract at cost 52.232-7b91)(ii)( If the latter, the items should be marked open market by the CO and in your invoices.

Dear Carl and H2H, For services, the denominator (base) just can't be "cost of performance" or "contract cost." The reg says, "50 percent of cost of performance incurred for personnel." Like Vern and Retreatfed, I can't find a definition of how to calculate that base in the regs and cases, and am glad of confirmation from better researchers than me. SBA's accounting opinion is astonishing. Thanks to all. C100

From the boldface type below? "Can the prime include the G&A on subcontracts in the calculations to achieve the goals of 51% per the above referenced FAR? Scenario - This is in reference to a CPFF type contract for technical/scientific support to an 8(a) ANC [Alaska Native Corporation] contractor serving as the prime; however they have proposed a subcontractor (a small business), and per FAR 52.219-14( (1) "Limitations on Subcontracting", the prime must perform at least 50% of the cost of contract. During review of the proposal, based on direct labor cost, the subcontractor is performing more than the prime. It appears the prime is including the G&A on subcontracts as labor." I don't see the answer in the reg: "(a) In order to be awarded a full or partial small business set-aside contract, an 8(a) contract, or an unrestricted procurement where a concern has claimed a 10 percent small disadvantaged business (SDB) price evaluation preference, a small business concern must agree that: (1) In the case of a contract for services (except construction), the concern will perform at least 50 percent of the cost of the contract incurred for personnel with its own employees. ... (2) Cost of contract performance incurred for personnel. Direct labor costs and any overhead which has only direct labor as its base, plus the concern's General and Administrative rate multiplied by the labor cost. " That can't mean, "Prime's G&A multiplied by the entire labor cost?" Also, what about the sub's G&A.

Old version pasted below. As readers of this board know, this and other clauses were not clear on how to treat subK labor on T&M contracts, as was recognized by all. (See, among others, http://www.gpo.gov/fdsys/pkg/FR-2006-12-12/html/06-9610.htm) DCAA said all subcontract labor fell in b below. http://www.dcaa.mil/mmr/m04pac022.pdf Note the markup on such labor is limited by ((4)(iii). Others said subcontract labor fell in a. In other words, any subcontractor could bill at preapproved rates in the contract, even if those rates had been approved for another subcontractor, or the prime (absent a separate requirement to get approval for subcontract. The controversy arose on GSA schedule contracts, because GSA was issuing T&M contracts on what was arguably NOT a commercial vehicle, which was forbidden before the SARA legislation in 2004 and because permission to subcontract had to be affirmatively required in a GSA task order. (And because GSA told everyone to bill their subs at prime’s GSA rates.) Sounds as though the first CO on this contract went with DCAA’s interpretation. I guess the second CO either takes the non DCAA read, or isn’t aware that the new clause is not in the contract. You are sure that it was not added by modification? If it was, then there should be other clauses that will outline requirements for bidding rates for prime v sub. Which of those new clauses is in the contract will vary depending on whether your contract is commercial and whether it was awarded noncompetively. Final question - Can you actually fit your subcontractors in to labor rates you already have on your contract, or will you have to get a mod? https://www.acquisition.gov/far/05-11/pdf/FAR.book.pdf 52.232-7 Payments under Time-and-Materials and Labor-Hour Contracts. As prescribed in 32.111(a)(7), insert the following clause: PAYMENTS UNDER TIME-AND-MATERIALS AND LABORHOUR CONTRACTS (AUG 2005) The Government will pay the Contractor as follows upon the submission of invoices or vouchers approved by the Contracting Officer: (a) Hourly rate. (1) The amounts shall be computed by multiplying the appropriate hourly rates prescribed in the Schedule by the number of direct labor hours performed. The rates shall include wages, indirect costs, general and administrative expense, and profit. Fractional parts of an hour shall be payable on a prorated basis. Vouchers may be submitted once each month (or at more frequent intervals, if approved by the Contracting Officer), to the Contracting Officer or designee. The Contractor shall substantiate vouchers by evidence of actual payment and by individual daily job timecards, or other substantiation approved by the Contracting Officer. Promptly after receipt of each substantiated voucher, the Government shall, except as otherwise provided in this contract, and subject to the terms of (e) of this section, pay the voucher as approved by the Contracting Officer. (2) Unless otherwise prescribed in the Schedule, the Contracting Officer may unilaterally issue a contract modification requiring the Contractor to withhold amounts from its billings until a reserve is set aside in an amount that the Contracting Officer considers necessary to protect the Government's interests. The Contracting Officer may require a withhold of 5 percent of the amounts due under paragraph (a), but the total amount withheld for the contract shall not exceed $50,000. The amounts withheld shall be retained until the Contractor executes and delivers the release required by paragraph (f) of this clause. (3) Unless the Schedule prescribes otherwise, the hourly rates in the Schedule shall not be varied by virtue of the Contractor having performed work on an overtime basis. If no overtime rates are provided in the Schedule and overtime work is approved in advance by the Contracting Officer, overtime rates shall be negotiated. Failure to agree upon these overtime rates shall be treated as a dispute under the Disputes clause of this contract. If the Schedule provides rates for overtime, the premium portion of those rates will be reimbursable only to the extent the overtime is approved by the Contracting Officer. (Materials and subcontracts. (1) The Contracting Officer will determine allowable costs of direct materials in accordance with Subpart 31.2 of the Federal Acquisition Regulation (FAR) in effect on the date of this contract. Direct materials, as used in this clause, are those materials that enter directly into the end product, or that are used or consumed directly in connection with the furnishing of the end product. (2) The Contractor may include reasonable and allocable material handling costs in the charge for material to the extent they are clearly excluded from the hourly rate. Material handling costs are comprised of indirect costs, including, when appropriate, general and administrative expense allocated to direct materials in accordance with the Contractor’s usual accounting practices consistent with Subpart 31.2 of the FAR. (3) The Government will reimburse the Contractor for supplies and services purchased directly for the contract when the Contractor— (i) Has made payments of cash, checks, or other forms of payment for these purchased supplies or services; or (ii) Will make these payments determined due— (A) In accordance with the terms and conditions of a subcontract or invoice; and ( Ordinarily within 30 days of the submission of the Contractor’s payment request to the Government. (4)(i) The Government will reimburse the Contractor for costs of subcontracts that are authorized under the subcontracts clause of this contract, provided that the costs are consistent with paragraph ((5) of this clause. (ii) The Government will limit reimbursable costs in connection with subcontracts to the amounts paid for supplies and services purchased directly for the contract when the Contractor has made or will make payments determined due of cash, checks, or other forms of payment to the subcontractor— (A) In accordance with the terms and conditions of a subcontract or invoice; and ( Ordinarily within 30 days of the submission of the Contractor’s payment request to the Government. (iii) The Government will not reimburse the Contractor for any costs arising from the letting, administration, or supervision of performance of the subcontract, if the costs are included in the hourly rates payable under paragraph (a)(1) of this clause. (5) To the extent able, the Contractor shall— (i) Obtain materials at the most advantageous prices available with due regard to securing prompt delivery of satisfactory materials; and (ii) Take all cash and trade discounts, rebates, allowances, credits, salvage, commissions, and other benefits. When unable to take advantage of the benefits, the Contractor shall promptly notify the Contracting Officer and give the reasons. The Contractor shall give credit to the Government for cash and trade discounts, rebates, scrap, commissions, and other amounts that have accrued to the benefit of the Contractor, or would have accrued except for the fault or neglect of the Contractor. The Contractor shall not deduct from gross costs the benefits lost without fault or neglect on the part of the Contractor, or lost through fault of the Government. © Total cost. It is estimated that the total cost to the Government for the performance of this contract shall not exceed the ceiling price set forth in the Schedule and the Contractor agrees to use its best efforts to perform the work specified in the Schedule and all obligations under this contract within such ceiling price. If at any time the Contractor has reason to believe that the hourly rate payments and material costs that will accrue in performing this contract in the next succeeding 30 days, if added to all other payments and costs previously accrued, will exceed 85 percent of the ceiling price in the Schedule, the Contractor shall notify the Contracting Officer giving a revised estimate of the total price to the Government for performing this contract with supporting reasons and documentation. If at any time during performing this contract, the Contractor has reason to believe that the total price to the Government for performing this contract will be substantially greater or less than the then stated ceiling price, the Contractor shall so notify the Contracting Officer, giving a revised estimate of the total price for performing this contract, with supporting reasons and documentation. If at any time during performing this contract, the Government has reason to believe that the work to be required in performing this contract will be substantially greater or less than the stated ceiling price, the Contracting Officer will so advise the Contractor, giving the then revised estimate of the total amount of effort to be required under the contract. (d) Ceiling price. The Government shall not be obligated to pay the Contractor any amount in excess of the ceiling price in the Schedule, and the Contractor shall not be obligated to continue performance if to do so would exceed the ceiling price set forth in the Schedule, unless and until the Contracting Officer shall have notified the Contractor in writing that the ceiling price has been increased and shall have specified in the notice a revised ceiling that shall constitute the ceiling price for performance under this contract. When and to the extent that the ceiling price set forth in the Schedule has been increased, any hours expended and material costs incurred by the Contractor in excess of the ceiling price before the increase shall be allowable to the same extent as if the hours expended and material costs had been incurred after the increase in the ceiling price. (e) Audit. At any time before final payment under this contract the Contracting Officer may request audit of the invoices or vouchers and substantiating material. Each payment previously made shall be subject to reduction to the extent of amounts, on preceding invoices or vouchers, that are found by the Contracting Officer not to have been properly payable and shall also be subject to reduction for overpayments or to increase for underpayments. Upon receipt and approval of the voucher or invoice designated by the Contractor as the “completion voucher” or “completion invoice” and substantiating material, and upon compliance by the Contractor with all terms of this contract (including, without limitation, terms relating to patents and the terms of (f) and (g) of this section), the Government shall promptly pay any balance due the Contractor. The completion invoice or voucher, and substantiating material, shall be submitted by the Contractor as promptly as practicable following completion of the work under this contract, but in no event later than 1 year (or such longer period as the Contracting Officer may approve in writing) from the date of completion. (f) Assignment. The Contractor, and each assignee under an assignment entered into under this contract and in effect at the time of final payment under this contract, shall execute and deliver, at the time of and as a condition precedent to final payment under this contract, a release discharging the Government, its officers, agents, and employees of and from all (FAC 2005–05) S UBPART 52.2—TEXT OF PROVISIONS AND CLAUSES 52.232-9 52.2-201 liabilities, obligations, and claims arising out of or under this contract, subject only to the following exceptions: (1) Specified claims in stated amounts, or in estimated amounts if the amounts are not susceptible of exact statement by the Contractor. (2) Claims, together with reasonable incidental expenses, based upon the liabilities of the Contractor to third parties arising out of performing this contract, that are not known to the Contractor on the date of the execution of the release, and of which the Contractor gives notice in writing to the Contracting Officer not more than 6 years after the date of the release or the date of any notice to the Contractor that the Government is prepared to make final payment, whichever is earlier. (3) Claims for reimbursement of costs (other than expenses of the Contractor by reason of its indemnification of the Government against patent liability), including reasonable incidental expenses, incurred by the Contractor under the terms of this contract relating to patents. (g) Refunds. The Contractor agrees that any refunds, rebates, or credits (including any related interest) accruing to or received by the Contractor or any assignee, that arise under the materials portion of this contract and for which the Contractor has received reimbursement, shall be paid by the Contractor to the Government. The Contractor and each assignee, under an assignment entered into under this contract and in effect at the time of final payment under this contract, shall execute and deliver, at the time of and as a condition precedent to final payment under this contract, an assignment to the Government of such refunds, rebates, or credits (including any interest) in form and substance satisfactory to the Contracting Officer. (h) Interim payments. (1) Interim payments made prior to the final payment under the contract are contract financing payments. Contract financing payments are not subject to the interest penalty provisions of the Prompt Payment Act. (2) The designated payment office will make interim payments for contract financing on the ______________ [ Contracting Officer insert day as prescribed by agency head; if not prescribed, insert "30th" ] day after the designated billing office receives a proper payment request. In the event that the Government requires an audit or other review of a specific payment request to ensure compliance with the terms and conditions of the contract, the designated payment office is not compelled to make payment by the specified due date. (End of clause) Alternate I (Mar 2000) . If the nature of the work to be performed requires the Contractor to furnish material that the Contractor regularly sells to the general public in the normal course of business, and the price is under the limitations prescribed in 16.601((3), add the following paragraph (6) to paragraph ( of the basic clause: ((6) If the nature of the work to be performed requires the Contractor to furnish material that the Contractor regularly sells to the general public in the normal course of business, the price to be paid for such material, notwithstanding the other requirements of this paragraph (, shall be on the basis of an established catalog or list price, in effect when the material is furnished, less all applicable discounts to the Government, provided that in no event shall such price be in excess of the Contractor’s sales price to its most favored customer for the same item in like quantity, or the current market price, whichever is lower. Alternate II (Feb 2002) . If a labor-hour contract is contemplated, and if no specific reimbursement for materials furnished is intended, the Contracting Officer may add the following paragraph (i) to the basic clause: (i) The terms of this clause that govern reimbursement for materials furnished are considered to have been deleted.