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Firm Fixed Price, Level of Effort Contract


Sue1234

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Can someone tell me where I can find guidance on incremental funding and Firm Fixed Price, Level of Effort? Initially, we were going to do the contract as a Time & Materials contract but have been told that we can no longer do T&M contracts. I read FAR 16.207 and believe that this type of contract would work in the place of the T&M; however, the customer plans to provide funding incrementally. Is this really incremental funding or is it phase funding, is there a difference? This is a non-severable contract, if that helps.

I have been looking for guidance on this topic and cannot find what I am looking for.

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Can someone tell me where I can find guidance on incremental funding and Firm Fixed Price, Level of Effort? Initially, we were going to do the contract as a Time & Materials contract but have been told that we can no longer do T&M contracts. I read FAR 16.207 and believe that this type of contract would work in the place of the T&M; however, the customer plans to provide funding incrementally. Is this really incremental funding or is it phase funding, is there a difference? This is a non-severable contract, if that helps.

I have been looking for guidance on this topic and cannot find what I am looking for.

See also here:

Quote

232.703 Contract funding requirements.

232.703-1 General.

(1) A fixed-price contract may be incrementally funded only if?

(i) The contract (excluding any options) or any exercised option?

(A) Is for severable services;

(B) Does not exceed one year in length; and

( C ) Is incrementally funded using funds available (unexpired) as of the date the funds are obligated; or

(ii) The contract uses funds available from multiple (two or more) fiscal years and?

(A) The contract is funded with research and development appropriations; or

(B) Congress has otherwise authorized incremental funding.

(2) An incrementally funded fixed-price contract shall be fully funded as soon as funds are available.

Unquote

If your are not in DoD, check your agency's FAR supplement.

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See also here:

Quote

232.703 Contract funding requirements.

232.703-1 General.

(1) A fixed-price contract may be incrementally funded only if?

(i) The contract (excluding any options) or any exercised option?

(A) Is for severable services;

(B) Does not exceed one year in length; and

( C ) Is incrementally funded using funds available (unexpired) as of the date the funds are obligated; or

(ii) The contract uses funds available from multiple (two or more) fiscal years and?

(A) The contract is funded with research and development appropriations; or

(B) Congress has otherwise authorized incremental funding.

(2) An incrementally funded fixed-price contract shall be fully funded as soon as funds are available.

Unquote

If your are not in DoD, check your agency's FAR supplement.

I am in DoD. Does it have to meet all three of these, i.e. severable? This contract is non-severable.

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I am in DoD. Does it have to meet all three of these, i.e. severable? This contract is non-severable.

There are two options for finding a fixed price contract incrementally:

1. The contract (excluding any options) or any exercised option is for severable services; does not exceed one year in length; and is incrementally funded using funds available (unexpired) as of the date the funds are obligated;

or

2. The contract uses funds available from multiple (two or more) fiscal years and the contract is funded with research and development appropriations; or Congress has otherwise authorized incremental funding.

Option 1 requires the contract to be for severable services. Option 2 does not.

You are not the first DoDer to confront DoD's discouragement of use of T&M / LH contracts. DoD prefers that you move from T&M or LH to FFP type contract, not to the FFP LOE type. Note that DoD collects info on these contract types and on the FFP LOE contract type. If you cannot do a FFP contract, move to a cost type.

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