Can anyone explain how the "would have cost" rule would work in the context of a deletion in scope in a CPFF contract that occurred 2 years ago, and a technical modification of the contract was agreed to then (customer worked with engineers who did estimates of the change, but provided no cost or pricing data), but the proposal deleting the dollars is not being prepared until 2011? There were no actuals, and the work deleted is not severable.

Do we have to get cost or pricing data updated as of 2011?

Does the language in FAR table 15.2 referring to deleted work that says "(2) Include the current estimates of what the cost would have been to complete the deleted work not yet performed (not the original proposal estimates), and the cost of deleted work already performed." mean current estimates as of the date when the mod occurred, or as of 2011?

Thank you.

Can anyone explain how the "would have cost" rule would work in the context of a deletion in scope in a CPFF contract that occurred 2 years ago, and a technical modification of the contract was agreed to then (customer worked with engineers who did estimates of the change, but provided no cost or pricing data), but the proposal deleting the dollars is not being prepared until 2011? There were no actuals, and the work deleted is not severable.

Do we have to get cost or pricing data updated as of 2011?

Does the language in FAR table 15.2 referring to deleted work that says "(2) Include the current estimates of what the cost would have been to complete the deleted work not yet performed (not the original proposal estimates), and the cost of deleted work already performed." mean current estimates as of the date when the mod occurred, or as of 2011?

Thank you.

(edited) I assume that the "mod" for the work isnt done yet. The revised work may or may not be completed.

I believe that the Table refers to cost estimates which are "current" as of the time that the deleted work would have been done, as opposed to the originally estimated cost used to price the contract.

Compare the estimated cost of the work not performed with the most current estimate of what the future new work will cost and/or the actual cost for that portion of the new work that is already performed, to the extent that actuals are determinable.

The requirement is necessary to measure the effect of "any such change [causing] an increase or decrease in the estimated cost of, or the time required for, performance of any part of the work ...", per the Changes clause at 52.243-2. So one generally compares an estimate of what it would have cost to perform the original work with the estimated or actual cost to perform the work as changed to determine the adjustment. Actual costs tend to be preferrable basis for the changed work, unless there is evidence that they are really unreasonable. The price included in the contract for the original work, if not completely segregable, is not necessarily the basis for the estimate of the deleted work.

As an aside, another note - once we have selected a contractor, we are stuck with each other. Just because the contractor doesnt have the latest, most efficient techniques or equipment, we cant necessarily say that its approach or productivity was "unreasonable". An example, Our estimator assumes the most efficient equipment would be used, which the contractor doesnt own or have on the job. It is more appropriate to recognize and use what is available for the basis of reasonableness.

Do we have to get cost or pricing data updated as of 2011?

Thank you.

I am assuming that the absolute value of the modification exceeds the contract's threshold for submission of cost or pricing data and no exception applies. The cost or pricing data used for deleted work is based upon the current estimate of what the deleted work would have cost. It isnt necessarily based upon the original, certified C&P data. Lots of stuff usually happens after the C&P data was certified, like revised sub quotes, a better understanding of the work, etc. Does that answer your question?

Qualification - the above answers are based upon "glittering generalities". There are all sorts of specific circumstances which deviate from the general rules. Recommend buying the Nash and Cibinic Books on "Government Contract Changes" or "Administration of Government Contracts"

I am assuming that the absolute value of the modification exceeds the contract's threshold for submission of cost or pricing data and no exception applies. The cost or pricing data used for deleted work is based upon the current estimate of what the deleted work would have cost. It isnt necessarily based upon the original, certified C&P data. Lots of stuff usually happens after the C&P data was certified, like revised sub quotes, a better understanding of the work, etc. Does that answer your question?

Qualification - the above answers are based upon "glittering generalities". There are all sorts of specific circumstances which deviate from the general rules. Recommend buying the Nash and Cibinic Books on "Government Contract Changes" or "Administration of Government Contracts"

The absolute value of the mod exceeds the threshold for submission of cost or pricing data, and no exception applies, so the cost or pricing data must be certified. The problem is that the technical change to delete the work was agreed years ago. I am told that the statement of Work was changed and the contract was modified but the Estimated Cost was not reduced. The giveback proposal for the deleted work is being done only now.

The absolute value of the mod exceeds the threshold for submission of cost or pricing data, and no exception applies, so the cost or pricing data must be certified. The problem is that the technical change to delete the work was agreed years ago. I am told that the statement of Work was changed and the contract was modified but the Estimated Cost was not reduced. The giveback proposal for the deleted work is being done only now.

I am assuming for this further answer that that the mod was issued to implement the technical change, stating that the equitable adjustment would be issued later. I dont know if that is accurate from what you said.

At any rate, I'd estimate what it would have cost to perform the original work, based upon the best info available at the time that the work would have been done ($a). I'd try to determine what the changed work cost to perform, if possible, If not possible, use the best info possible to estimate the cost of the new/changed work when it was or will be done ($.

Further assumption - there was no agreement on the adjustment at the time.

I am assuming for this further answer that that the mod was issued to implement the technical change, stating that the equitable adjustment would be issued later. I dont know if that is accurate from what you said.

At any rate, I'd estimate what it would have cost to perform the original work, based upon the best info available at the time that the work would have been done ($a). I'd try to determine what the changed work cost to perform, if possible, If not possible, use the best info possible to estimate the cost of the new/changed work when it was or will be done ($.

Further assumption - there was no agreement on the adjustment at the time.

Your assumptions are correct.