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:

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.

1. 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)).
   
2. 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.

1. 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.
   
2. 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.

Well, you can't invoice them for the full 20800 hours unless you deliver the full 20800 hours. My question is, without a change order, can you just keep providing the hours even if they don't want them? I suppose if you are working at a government facility, or if you have no work that you could be doing, that might be difficult... That's a problem with using this contract type as a substitute for T&M rather than for it's real purpose as Vern has stated.

Absolutely.

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.

Huh?! You cannot use the changes clause at FAR 52.243-1 to order hours! Read the clause. It says what a CO can do with a change order. Where does it say anything about being able to issue a change order to order hours?

Really, contractor100, read the clauses.

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

I don't see what you see in that question.

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.