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Joel,

What is the benefit of using such a scheme? It seems to me that it is difficult to manage from both sides, and can be interpreted differently by each side even when the inputs are agreed upon by both sides.

I can understand why I have never seen this pricing scheme, I have not worked for the USACE or the USAF, I have worked for NAVFAC and the Army Contracting Agency and they did not use such a complicated pricing system in those organizations.

I wonder if the Army's pricing "scheme" (perhaps that word is especially apt in this case), is the norm for commercial construction contracting or found in any other Government contracting offices. I have worked on construction contracts for both Navy and Army organizations and I have never seen such a "scheme" in use in those offices. I cannot imagine that a commercial construction contract would base its pricing on such an arcane system when simply adding the allowable costs seems to be sufficient.

I also wonder why any commercial company, short of desperation, would agree to such terms.