CPIF Contract Exceeding Target Costs

[Contract Noob]

I have a situation i have come across and have not been able to find much help so I am turning to the community here for assistance. I awarded a Cost Plus Incentive Fee (CPIF) contract for research and development and today the awardee has been funded up to their target cost on the contract and we now are trying to begin to fund past the target costs. The issue I am having is that when we go to award we are getting an error when trying to validate the CAR (FPDS-NG). I am receiving the following error:

Error Code: 3C04 - The sum of "Action Obligation" for all transactions with the same PIID must be less than or equal to sum of the "Change in Base and Exercised Options Value."

I do not believe contractually anything is wrong as we are still in the Range of Incentive Effectiveness (RIE) for the CPIF contract but we cannot fix the error on the CAR. The thought process was to continue to fund the CPIF under the appropriate CLIN(s) and increase the estimated costs in a narrative we incorporated in section B. 

My question is does the CAR just not support a CPIF funded past target costs, are we funding this incorrectly, or is there a better way for me to structure the contract? By passing the error on the CAR requires very high approval and since we are incrementally funding this I cannot imagine having to get this approval every modification. Help!

[Don Mansfield]

Doesn't FPDS-NG have a help desk or something?

[Contract Noob]

2 hours ago, Don Mansfield said:

Doesn't FPDS-NG have a help desk or something?

Of course they do but when I reached out, according to them, there is nothing wrong with the FPDS system it is working correctly.. My question is, did we correctly configure the contract to account for the CPIF costs? If that is the case then the FPDS system just doesn't have the capability to match the contract correctly. I am getting some pushback that we can treat it like a CPFF and create new CLINs that would in effect increase the ceiling and "talk" to the FPDS system with no errors. 

[Retreadfed]

35 minutes ago, Contract Noob said:

My question is, did we correctly configure the contract to account for the CPIF costs?

I don't think anyone here can answer that question without seeing the contract.

[ji20874]

...and seeing how the data was entered on the original CAR and the current non-validating CAR.

[Contract Noob]

16 hours ago, Retreadfed said:

I don't think anyone here can answer that question without seeing the contract.

It is really not to difficult to understand. In my opinion any contract professional with experience will be able to grasp what we did if I can explain it well. We are incrementally funding the CLIN under the contract and when we reached the target costs we then created a new SLIN under CLIN 0001 to show the costs over target cost, which looks like this:

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SUBCLIN 000110 is added as follows:
ITEM NO      SUPPLIES/SERVICES    MAX QUANTITY    UNIT     UNIT PRICE    MAX AMOUNT
000110                                                  UNDEFINED                     UNDEFINED                   $0.00
                     CLIN 0001 Overrun
                     CPIF
                     PURCHASE REQUEST NUMBER:REMOVED
                                                                                            TARGET COST               UNDEFINED
                                                                                               TARGET FEE                UNDEFINED
                                                                           TOTAL TGT COST + FEE                           $0.00
                                                                                             MINIMUM FEE                          $0.00
                                                                                            MAXIMUM FEE                          $0.00
                                                                     SHARE RATIO ABOVE TARGET
                                                                     SHARE RATIO BELOW TARGET
                    ACRN XX                                                                                                    $123,111.12

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We also added the following text in Section B:

CLIN 0001 ESTIMATED COSTS
CLIN 0001 has exceeded target costs, the estimated cost as of this modification for CLIN 0001 is $12,345,678.90. The Government heretofore will be funding to the estimated costs subject to the availability of funds. The target cost has not changed.

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Also doing some research just now i found a thread here on wifcon with a comment from Vern about how to setup a contract and i believe I did it the same way. 

[Vern Edwards]

@Contract Noob

1 hour ago, Contract Noob said:

In my opinion any contract professional with experience will be able to grasp what we did if I can explain it well.

I can't grasp why you created a contract line item for "Estimated Costs," and I don't grasp why you created a new subline item (SLIN) for the costs over target. That strikes me as looney. You didn't learn that from anything I ever wrote or even thought.

You—or someone in your organization, or maybe your entire organization—do not understand the rules about establishing contract line items and subline items.

CLINs and SUBCLINs are supposed to identify contract deliverables—items of supplies or services—and the prices or estimated costs and fees associated with them. See FAR Subpart 4.10, Uniform Use of Line Items, especially sections 4.1003, Establishing line items, and 4.1004, Establishing subline items. If you work for DOD, see the corresponding DFARS rules. Costs are not deliverables, dammit! Costs, including overruns, are to be charged to the deliverable (CLIN) for which there were incurred. 

I presume that your moniker means you are new to contracting. If so, find someone who knows what they're doing—if any such person exists in your office—to explain CLINs and SUBCLINS. And read the regulations.

[Contract Noob]

2 hours ago, Vern Edwards said:

@Contract Noob

I can't grasp why you created a contract line item for "Estimated Costs," and I don't grasp why you created a new subline item (SLIN) for the costs over target.

Ouch  Right or wrong, I am trying my best. To maybe clear it up I did not create a contract line item for estimated costs. What you see above is just text added in section B to mention the estimated costs because the contract writing system does not have a function to do that. THAT IS NOT A CLIN. The SLIN added for costs over target was done because we are incrementally funding the contract and that was the funds we received at that time. It is an information SLIN. Are you saying it was incorrect the way it was done, how should I have done this? Clearly i am not getting good direction  

[Contract Noob]

2 hours ago, Vern Edwards said:

@Contract Noob

I can't grasp why you created a contract line item for "Estimated Costs," and I don't grasp why you created a new subline item (SLIN) for the costs over target. That strikes me as looney. You didn't learn that from anything I ever wrote or even thought.

 

This is the thread i was referring to that i seen which is how my contract is setup:

 

[Vern Edwards]

1 hour ago, Contract Noob said:

The SLIN added for costs over target was done because we are incrementally funding the contract and that was the funds we received at that time. It is an information SLIN. Are you saying it was incorrect the way it was done, how should I have done this?

It is incorrect from the standpoint of the FAR and the DFARS. But I don't know what agency you work for and what rules it may have established.

You don't need a new subclin when you increase the total amount allotted to an incrementally funded contract. You just write a funding mod that states that the total amount allotted is increased by $_____ from $_____ to $_____ and states the new period of performance expected to be covered.

I believe that you are trying to do your best. But it appears that your superiors haven't shown you how. Maybe they don't know.

[REA'n Maker]

Quote

Of course they do but when I reached out, according to them, there is nothing wrong with the FPDS system it is working correctly.. 

FPDS is definitely buggy but based on your later post it seems clear the problem is the way it was entered into your local contract writing system, which in turn feeds FPDS. You are trying to put too much in a data field intended for the plain English description of the item or service being acquired.  

Without knowing specifics, the only advice I can offer regarding how to address your problem is:

1. Don't enter duplicate data. Say it once and say it clearly;
2. Don't use CLIN Descriptions for accounting information that is not auto-rendered;
3. Simplify everything if not for your own sanity, but for the sake of the poor slob who's gotta' figure it out after you move upwards or onwards;
4. Try to make your CLINs track 1-1 to your funding as much as possible;
5. Use sub-CLINs as little as possible (Ok maybe a personal preference here but there seems little upside in general, and some IT systems never adopted that convention);
6. Copy Rule 3 and put it on your wall.

The cost and target information would be better placed in Block 14 of the SF30 which provides the funding for the increase.  How to untangle the CLINs in the contract writing system to fix the FPDS errors is something I'm not sure any human knows.  Good luck.