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I am administering a CPFF subcontract and the subcontractor would like to extend the period of performance for 2 months without charging costs.

would it be better to write a new subcontract that is FFP with $0.00 value? Basically the subcontractor is willing to finish the work and eat the costs to look good to the ultimate "government customer".

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Guest Vern Edwards
I am administering a CPFF subcontract and the subcontractor would like to extend the period of performance for 2 months without charging costs.

would it be better to write a new subcontract that is FFP with $0.00 value? Basically the subcontractor is willing to finish the work and eat the costs to look good to the ultimate "government customer".

Don't write a new subcontract. The easiest way would be to modify the subcontract to extend the period of performance and to stipulate that all costs incurred after a specific date, and the associated indirect costs, are unallowable by mutual agreement and that there is no increase in fee. The agreement should also state that the indirect costs incurred during the no-cost period should be excluded from calculations of the indirect cost rates applicable to the prior period. This should be very simple, and the modification need not be long or complicated.

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If the subcontract includes the usual cost-reimbursement "best efforts" language, such as in FAR 52.232-20, Limitation of Cost, I suggest you also include language in the mod to require the subcontractor to complete the job

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