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About Retreadfed

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  1. None of these elements are present in my hypothetical.
  2. There is a contractual prohibition against a prime contractor entering into a CPPC contract. However, 52.244-2(g) does not define what is a CPPC contract. We have to look elsewhere for such a definition. In this regard, lets take a simple example of what is and what is not a CPPC contract. Contractor X awards a CPFF subcontract with an estimated cost of $1M. In determining what would be an appropriate fixed fee, X determines that a 7% fee is acceptable and includes a fixed fee of $70K in the subcontract. Later, X determines that the subcontractor is entitled to a $100K increase in the es
  3. I don't know since Constricting did not explain his answer. Are we to agree simply because he says so?
  4. If the prime uses the same percentage to derive a fixed fee in a sum certain of dollars, no CPPC contract exists. Further, while there is a contractual prohibition on the use of a CPPC subcontract (see FAR 52.244-2(g)), the statutory prohibition only applies at the prime contract level and is a prohibition on government conduct.
  5. There is no such clause now. However, in ancient times, the LOC clause did specifically state that fee would not be adjusted if the government added more funding to a contract to cover costs in excess of the estimated cost of the contract. Over time, it appears that this became the accepted doctrine under the LOC clause. However, at some point, the language on fee was removed from the LOC clause and everybody, including the boards of appeals and COFC continued to apply the no increase in fee rule. As for Don's post, FAR 16.306 is generally not a part of a contract. If it is not incl
  6. What do you mean by "severable and non-severable CLINS" and funding allocated by CLIN?
  7. I tend to agree with H2H in regard to his analysis of this reasoning. There are several flaws with this statement. First, this statement mischaracterizes what is a direct cost. Simply put, in accordance with both the FAR and CAS, a direct cost is one that benefits only one cost objective. Thus, if a cost benefits more than one cost objective, that cost generally cannot be allocated as a direct cost of a single contract but must be allocated to the benefited cost objectives based on the relative benefits received from the cost by those cost objectives. Therefore, before overrun costs from
  8. Why was it necessary to use funding from a different pot of money for each category? That what really seems strange to me.
  9. Joel, 31 U.S.C. 1342 prohibits the government from accepting voluntary services. It does not prohibit a contractor from performing voluntary services. Thus, if there is a statutory violation here, it was committed by the government. I don't think you want to go there yet because of the criminal penalties that can be imposed on government personnel due to a violation of the statute. We don't know all the facts so we cannot say there has been a statutory violation, that the contractor has no entitlement to payment or that the contractor is entitled to payment. Right now, all I think we can
  10. Why did this happen? Was it due to your negligence or the fact that you do not have systems in place to tell you when you are approaching the ceiling amount? On the other hand, was it because you could not have known of the overrun before it happened even if you had adequate systems in place?
  11. Lotus, I am curious about this statement. It seems to imply that a T&M contract is a form of level of effort contract. Is that your understanding of a T&M contract?
  12. A fixed fee is stated in a specific dollar amount. Thus, a contractor could be proposing a fixed fee of $100K for the base year of a contract that has an estimated cost of $1.5M. For an option period, the fee proposed could be $100K with an estimated cost of $1M. On the other hand, you could be meaning that the subcontractor proposed a 7% fee for both the base period and option period, but the dollar amount of the fee would be different based on the estimated cost of each performance period. Finally, you could have had something totally different in mind.
  13. Why? What is your rationale for this conclusion? A 35% increase would mean, for example, that the subcontractor increased its fee from 6% to a little over 8%.
  14. General, can you explain this sentence? What is the connection you see between proposed fee, whether proposed erratically or otherwise, and defective pricing? The fee a subcontractor proposes is not a cost to the subcontractor.
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