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FFP Service Contract contains FAR 52,243-1 Alt I . Contract originally awarded competitively. Contract mod issued to extend period of performance for specific task activities within the overall contract period of performance. (not an extension of the contract period of performance.) Requires certified cost pricing data. Contractor submitted proposal 6 months ago with not to exceed amount. Due to reasons which are not clear to me, the mod / propopsal was not acted upon so six months of performance has now been incurred. Requested cost anlaysis and the analyst insists since 6 months of performance has ensued that the contractor must submit actual costs for the work already performed under the change order. Is this correct if it is a FFP contract? I see FAR 43.204 requires CO to make sure cost analysis is performed if required under FAR 15.404-1© and while the various cost anlaysis techniques refer to verifying projected costs based on historical trend and comparison of costs proposed with actual cost previously incurred, is there no difference when it's a FFP contract? Does the contractor have to provide the requested actual costs for the first six months performance of the undeifinitzed contract mod proposal?

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Look at Table 15-2 in FAR Part 15 -- Table 15-2 is Instructions for Submitting Cost/Price Proposals When Certified Cost or Pricing Data Are Required. It might answer your question. See Note 1, where you read the contractor has to submit data, and has to submit data later as it becomes available. We also read, "The requirement for submission of certified cost or pricing data continues up to the time of agreement on price, or an earlier data agreed upon between the parties if applicable."

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FFP Service Contract contains FAR 52,243-1 Alt I . Contract originally awarded competitively. Contract mod issued to extend period of performance for specific task activities within the overall contract period of performance. (not an extension of the contract period of performance.) Requires certified cost pricing data. Contractor submitted proposal 6 months ago with not to exceed amount. Due to reasons which are not clear to me, the mod / propopsal was not acted upon so six months of performance has now been incurred. Requested cost anlaysis and the analyst insists since 6 months of performance has ensued that the contractor must submit actual costs for the work already performed under the change order. Is this correct if it is a FFP contract? I see FAR 43.204 requires CO to make sure cost analysis is performed if required under FAR 15.404-1© and while the various cost anlaysis techniques refer to verifying projected costs based on historical trend and comparison of costs proposed with actual cost previously incurred, is there no difference when it's a FFP contract? Does the contractor have to provide the requested actual costs for the first six months performance of the undeifinitzed contract mod proposal?

1. If the change is being negotiated 6 months after submission of cost or pricing data, the data is no longer "accurate, complete and current" is it?

2. Per Nash and Cibinic's Administration of Government Contracts (4th Edition), page 691 and following discussion..."The preferred method for establishing the amount of the adjustment is through the introduction of actual cost data for the additional work. The Boards and Courts have regularly underscored this preference." [numerous cases are cited in support of that statement.]..."The preference for actual cost data is highlighted by the requirement that contractors submit 'accurate, complete and current' cost or pricing data in support of contract modifications over" [$550,000 at the time of publication].

3. Be aware though that contractors don't always have the ability to segregate change order costs from costs of the other, unchanged work. In that case, some discretion mkay be allowed, unless the general costs can be related to the work in the modification.

4. There are some limits to this methodology and I would recommend reading the entire section on pricing of adjustments - in fact the entire book - if you are going to be negotiating modifications or otherwise administering government contracts.

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Guest Vern Edwards

Contract mod issued to extend period of performance... Requires certified cost pricing data. Contractor submitted proposal 6 months ago with not to exceed amount... Requested cost anlaysis [sic] and the analyst insists since 6 months of performance has ensued that the contractor must submit actual costs for the work already performed under the change order. Is this correct if it is a FFP contract? ... Does the contractor have to provide the requested actual costs for the first six months performance of the undeifinitzed contract mod proposal?

If the contractor is required to submit certified cost or pricing data, then the answer is yes, because incurred costs are cost or pricing data. See the definition of "cost or pricing data" in FAR 2.101. See also, Bodenheimer, Defective Pricing Handbook, 2011-2012 Ed., § 4:13:

Typically, actual cost history falls within the scope of cost or pricing data under the Truth in Negotiations Act. [Footnotes omitted.]

This is just as true for FFP contracts as for any other type.

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Answers to clarifying questions above.

1. Contract Spec. working for CO who just inherited this contract from a CO who left the agency.

2. Only mod clause is 52-243-1 Alt 1

Thanks for the answers above. The contractor is adamant they do not have to provide actuals because it is a FFP contract. They would be disclosing company sensitive data, etc. Stating that no where in FAR does it say they have to do this for FFP. They even quoted from 15.4 Sigh.

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Username, I'm still trying to be helpful. Does your contract include the clause at FAR 52.215-21? How about the clause at FAR 52.243-6?

But I'm sympathetic to Vern's last comment, so let me ask -- What do you or your contracting officer believe? Do you believe the contractor must provide actuals?

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This seems to be a common thing, where a contractor receives an FFP contract and then, somehow, it turns into a cost-type contract with respect to providing actual cost information.

When the contract was awarded, the contractor had an accounting system adequate for an FFP contract. Did anybody check to see if the accounting system was adequate for a cost-type contract? No? Then what happens when the contractor cannot provide the requested information because its accounting system is inadequate for the task?

In this case, one might well think the contractor should be able to easily show at least the bulk of the changed work, because it seems to be a simple task PoP extension. Show the hours charged to the task after the original PoP end date. Easy, right? But what if the contractor doesn't have good timekeeping practices? What if nobody charged to the task? What then? I mean, who would care since this is an FFP contract that was competitively awarded. The Government was going to pay the same price whether personnel accurately charged to the job or not.

I understand how these things happen. UCAs need to be definitized, contracts get T4C'd, a contract mod requires cost analysis. I get it. It's just that so many contractors do not get it at all. They may not have accounting systems that support anything other than the traditional FFP contract and that's all the parties contemplated at contract award. That is all many contractors can handle. Those contractors knew cost risk was on them, and they knew (absent allegations of defective pricing) the government was not going to care about actual costs incurred. Or at least, that's what they thought they knew at contract award.

Now things have changed and it seems that neither party knows how to deal with the new situation.

And as Joel posted above, many contractors (including the big guys) don't do a great job of segregating the costs of the changed work (assuming that's even possible in complex systems). For the big guys, this is a tough job; but for the small businesses? It's well nigh impossible.

It's almost like I want to tell every single Government contractor: "You must ignore the contract type you think you have, and assume it will be treated as a cost-type contract by the Government." That may be going a bit too far, but my experience tells me it's not that wrong either.

H2H

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