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Good afternoon everyone, I have a couple questions concerning FAR 52.232-22 Limitation of Funds that I was hoping someone could answer. Does the LOF clause apply to each CLIN on a contract? In other words, if I have a contract containing a CPFF CLIN for Labor and a COST only CLIN for Travel, would I have to give separate notifications for each CLIN once 75% of the current funding is expended? Or is it based on the overall cumulative funded amount of both CLINS (Labor & Travel), in which case I would then give notice when 75% of the combined funding is expended. Is FAR 52.232-22 cost specific, or does it include incremental fixed fee funding as well? Section (b) of the LOF FAR states the following: " (b) The Schedule specifies the amount presently available for payment by the Government and allotted to this contract, the items covered, the Government’s share of the cost if this is a cost-sharing contract, and the period of performance it is estimated the allotted amount will cover. The parties contemplate that the Government will allot additional funds incrementally to the contract up to the full estimated cost to the Government specified in the Schedule, exclusive of any fee. The Contractor agrees to perform, or have performed, work on the contract up to the point at which the total amount paid and payable by the Government under the contract approximates but does not exceed the total amount actually allotted by the Government to the contract." Given this provision of the FAR I am assuming the LOF notification should be based on incremental COST funding only, and would exclude incremental Fixed Fee Funding, and would apply both to CPFF contracts and CPIF Cost Sharing Contracts . If anyone can provide any insight it would be much appreciated. Thank you.
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I would like some help with the probable outcome for this question. A CPFF term contract for $60MIL incrementally funded. The Government funds only $30MIL and extends the contract twice to continue performance, but still does not reach the full obligation. Now the contract is ending and no more funding will be obligated. The Schedule Obligated Amount clause says that the funds are allotted for "allowable costs (and fee if any)" (emphasis added). The contract includes the LOF clause 52.232.22. The Contractor realizes it has made an accrual mistake in the accruals of incurred costs and has a deficit of $1MIL over the obligated amount if you include the earned fee. Without counting the earned fee (CPFF term = LOE delivered x fee per day), the Contractor has incurred costs within the obligated amount. The performance was accepted and lauded by the client as Exceptional. The Contractor mistakenly relying on available funds numbers offered to the Government and with acceptance performed more work than originally planned for the same obligated amount. The Government argues that since no timely notification under the LOF clause was provided, the costs would not be reimbursed since the obligation covers costs and fee and the Government is not obligated to reimburse above the obligated amount. Cost Reimbursement Contracting (Cubinic and Nash) states under Control of Funding Limitation of Funds clauses, that if the "funds are allotted in a single figure, it has been held that the contractor can apply the full allotment to performance costs". Would this argument work in the scenario above? If the Government refuses, is this a legitimate claim argument? Many thanks.
