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  1. Query


    This is a pretty muddy problem. We accepted the VE but, had no discussion about price adjustment or anything to do with pricing until just now. Of course, the Contractor is pushing back and doesn't want the price adjustment, on the grounds that it is not correct. I can nothing that talks to my situation. Do you have a recommendation for another resource on VECPs?
  2. Query


    I can see you agree with me that this is a tough one. Yes - 52.248-1 is in the contract. My problem is really the retroactive way my VECPs are being put into the contract. No - none of my VECPs have been definitized, and most of them started in FY03. I am trying to clean up a large mess. I not really adjusting profit - I'm trying to get back to somewhere closer to what my real FFP would be if we had brought the VECPs in at the proper time. We have been paying the old (higher) FFP for a number of years, mainly because VECPs were pushed behind more immediate issues. I have not been able to find anything that says it is not allowed - so I was hoping for some guidance in maybe case law or......
  3. Query


    Thanks for looking this over - any help will be greatly appreciated. I am at a stop on this issue. Let me provide information for #1 - These are Firm Fixed Price units - and the process to arrive at the price is a bundle of - Materials, labor, indirects then fee as a percent = FFP for the item. #2 - The VECP is voluntary. The 10 in my scenario is $10dollars, which is a function of the Cost of Work Deleted + Cost of Work Added = Savings. Yes, some of these units have been delivered with the VECP part. Execution - They have priced in the FFP the old part with the higher price but, executed by obtaining the cheaper part. Why did it take so long - I am sure you are correct with your guess.
  4. Query


    I looked over my first posting and it is confusing. Look over the following and let me know if I am correct in trying to recover the $1.50 of overpayment? ******************************************* VECP Discussion ISSUES 1) We are doing this retroactivity The correct way to institute this would be FY09 the old unit is purchased and I paid the old price of $100 During FY09 the VECP is raised, technically accepted and negotiated FY10 the new unit is purchased and I paid the new $90 price. The way we have done this: FY03 through FY07 the new unit is purchased/cut-in by contractor but, I pay the old unit price, because it is not on contract yet. Scenario Unit Cost Fee Fee on unit $ 100.00 15% $ 15.00 $ 90.00 15% $ 13.50 $ 1.50 Credit Savings $ 10.00 75% $ 7.50 Raytheon Share Net $ 6.00 2) We are not reducing your profit FAR Part 48 talks about ? - 48.102 (e) ?talks to not considering VECP savings as part of the limitations under 15.404. We are not. - 48.102 (f) ? talks to not reducing fee/profit on the contract ? which the scenario shows we are not. Also, it talk to Profit/fee shall be excluded when calculating savings, which we are not. **********************************************
  5. Query


    Doesn't anybody have some help on this issue????
  6. Query


    I have a question concerning VECPs and accounting/paying for savings dollars in the contract. Situation - I have VECPs that were cut-in to production in FY03. We paid the old price for the part in the FY03 - FY07 FFP contract, including fee on the old part. We have finally settled the amount of savings and now want to cut it into the contract. Let say the savings are $1,000. We calculated the $1,000 on cost only. So, I paid $1,000 more of cost than we should have. But, in reality I paid $1,000 of cost plus 10%(fee) more than I should of. Does my VECP savings spreadsheet then calculate $1,000 per unit and 10% credit for overpaid fee?