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Is there a 'rule of thumb' in how much funding to leave on an expired option year in case of 'rate changes'?

Are there other legitimate reasons for not de-obligating funds on a CPIF service contract once the services have completed?

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I get that, but this is a five-year contract with a base and four options. We are currently in the first option year, which is about to expire. I've tracked expended vs obligated funds across the first two option years. To date, OY00 has 49% still obligated on that option year. OY01 still has 60% obligated and the option ends in two weeks. So if you look across both option years, over half of all the funding that was sent is still on contract. Some of that may be reduced due to billings and a fraction may be needed for 'rate changes' but shouldn't there be a limit? I'm just looking to understand what is reasonable.

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Have you tried asking the contractor what rate impacts it expects from its subKs and/or itself? I bet the contractor could come up with a fairly good estimate, if asked to do so. If they can't get within +/- 5%, you have a different problem to deal with.

H2H

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Guest Vern Edwards

Is there a 'rule of thumb' in how much funding to leave on an expired option year in case of 'rate changes'?

Are there other legitimate reasons for not de-obligating funds on a CPIF service contract once the services have completed?

1. There is no rule of thumb.

2. Yes. At the end of an option year there will still be unresolved cost issues. Allowable incurred costs will have yet to be finally determined and final determination might take a while. The CO should have an up-to-date estimate at completion from the contractor and should retain enough funds to cover that amount plus a reasonable contingency plus anticipated earned incentive fee.

If I recall correctly, you have come to Wifcon with questions about funding several times in recent days. If I recall, you are not a contracting officer. Apparently, you are not able to get satisfactory answers from anyone in your own organization. What you are getting here are brief, simple answers to what can be complex issues. If this topic is something you need to know for your job, then you need to obtain and thoroughly familiarize yourself with three references:

1. The GAO Red Book (Principles of Federal Appropriations Law), which you can find at www.gao.gov.

2. Cost Reimbursement Contracting 4th ed., by Cibinic and Nash.

3. Government Contract Costs and Pricing 2d ed., by Manos.

Plus any pertinent regulations and policies of your agency.

Plus the clauses in the contracts with which you work.

It always bothers me to see someone new to this site coming back again and again with questions about a particular topic. It bothers me because such persons are looking for quick answers, and sometimes the answers should not be quick. If you need to know this topic, then learn it properly, from reliable sources, through proper training and study.

By the way, I bought one of your novels. Will read it soon.

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