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Showing results for tags 'CPIF cost overruns'.
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I administer a CPIF contract that has a target cost of $13M, target fee of $1.6M. The min fee is 5% and the max is 21%. The scope is R&D medical related. The work is not complete and has not increased nor decreased. The contractor has billed costs up to the target costs of $13M and fee of $1.5M. We have encountered extensive overruns, which is not uncommon in this work scope. I am adding $4.7M of funds for the work to continue, but this passes the RIE point of $16.4M. I know adding the $4.7M in funds increases my estimated cost but not my target cost. My question is related to the invoicing of fee on the remaining contract. The contractor will only be entitled to the minimum fee of 3% of the TC ($13M), but has already been paid at the target fee rate (minus the reserve of $100k). Does the contractor not invoice for fee for any costs past the RIE, which is what seems like common sense to me other than the contractor really has no reason to continue at all? Or does the contractor invoice at the min fee % and then the money paid out in fee at closeout is recouped by the Treasury, to me this seems to set up the contractor with the opportunity to file bankruptcy after collecting fee for x number of years? I've searched all over and have not been able to find anything regarding this situation. As I previously stated, this work is extremely difficult to propose a good estimated cost at time of award due to the developmental nature. I appreciate any insight anyone can provide.
