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Showing results for tags 'cost-reimbursement'.
I currently have a request to extend what was initially a 6-month fixed-price delivery contract using FAR 52.217-9, with the reason being the host country was not yet ready for receiving the items (the contractor has performed satisfactorily and had the items ready to ship when the contract required). Because the exact amount of time the contractor will have to hold onto the items is not known, I was going to add a funded cost-reimbursement CLIN, de-obligating the amount not used once the items are delivered. Another CS informed me the FAR does not allow adding CLINs to an extension, but could not find the citation. I also looked throughout the FAR, Wifcon, and asked other CSs and have not found anything stating this is not allowed. The effort to be expended is the exact same as under the original fixed-price contract, so there is no change in scope, just using cost-reimbursement. Before completing the modification, I want to ensure the addition of the CR CLINs is allowable.
Are cost-reimbursement contract types supposed to include "profit"? I read in the JAG Deskbook that the answer is no. It says that, for cost-reimbursement contract types, if it is just a cost contract, no award fee/incentive fee, then "The government pays the contractor's allowable costs plus a fee (often erroneously called profit) as prescribed in the contract. What does that mean? If a contract is just a cost-reimbursement contract, no award fee/incentive fee, then it looks to me like only the "allowable costs" are allowed. And those allowable costs DO NOT include profit. Can anybody explain this to make sense?