Definition: A reimbursement contract is a contract in which all of the contractor`s eligible costs are covered up to an agreed limit and an additional payment for a profit. (4) If the contract is land or a local authority, the contract agent shall apply clause 52.216-7 with his deputy III. (ii) The Contract is for development and testing, and the use of a Cost Plus incentive fee contract is not feasible. Yes, there are other types of „cost-plus“ contracts that take into account expenses other than project costs. These may include: Any reimbursement contract must include a „cost limitation“ or „funds limit“ clause that limits the government`s liability if the contractor exceeds the estimated total cost. Fixed-cost contracts can be used if the contractor and owner agree that the contractor is entitled to a fee in addition to the costs of the project. There may be a variety of reasons for this agreement, but cost-plus contracts must also state the fundamental reasons why the contractor is entitled to the fees. There should also be provisions that deal with the legal consequences of non-compliance with the rules on fees. 2.
Where a reimbursement research and development contract is envisaged with an educational institution or non-profit organisation which does not pay a fee or other payment in excess of the costs and which is not a cost-sharing contract, and the contracting entity finds that the retention of part of the reimbursable costs is not necessary, the procuring entity applies the clause with its variant I. (3) Because of the various obligations assumed by the contractor, the completion form is preferred to the term form if the work or certain milestones of the work can be defined well enough to allow the development of estimates in which the contractor can be expected to complete the work. (a) Description. A cost-sharing contract is a cost-reimbursement contract in which the contractor receives no royalties and is only reimbursed for an agreed portion of its attributable costs. Some of these contracts may be restricted by local or state laws, so it`s best to contact an experienced attorney before signing a cost-plus contract. A fixed-cost plus-cost contract is a specific type of contract in which the contractor is paid for the normal expenses of a project plus additional fixed costs for its services. These allow the entrepreneur to benefit from the project and promote economic production in various industries. Fees can only be changed if the government changes the scope of work in the contract. 1. The filling form shall describe the scope of work, specifying a specific objective or objective and specifying a final product. This form of contract usually requires the contractor to complete and deliver the specified final product (e.g.
B a final report on the research that achieves the objective or objective) within the estimated cost and, if possible, as a condition of payment of the full fixed fee. However, in the event that the work cannot be completed within the estimated cost, the government may require more effort without increasing the fee, provided that the government increases the estimated costs. (4) The term form may be used only if the contractor is required by the contractor to make a certain effort within a certain period. (b) The procuring entity shall document the justification for the choice of the type of procurement in the written procurement plan and shall ensure that the procurement plan is approved and signed at least one level above the procuring entity (see 7.103 letters (j) and 7.105). Costs plus fixed-fee contracts can sometimes be complicated to manage. (5) If the contract is with a non-profit organization that is not an educational institution, a state or a local government, or a non-profit organization that is exempted under the OMB Uniform Guidelines in 2 CFR Part 200, Annex VIII, the contract agent shall use clause 52.216-7 with its alternative restrictions IV.c). No fixed-price contract will be awarded unless customer complies with all the restrictions set forth in sections 15.404-4(c)(4)(i) and 16.301-3. (d) Completed and enforcement forms. A contract with a fixed cost plus fee can take one of two basic forms: closure or duration. Therefore, both parties should weigh the pros and cons before entering into a fixed-cost, cost-price contract.
Again, each contract will be different, depending on the type of project involved and the relationship of the parties. (b) enforcement. A cost contract may be suitable for research and development work, in particular with non-profit educational institutions or other non-profit organisations. A reimbursement contract requires the contract agent to negotiate an „estimated total cost“ and the payment of a fixed commission to the contractor. The estimated total cost is a contractual cost limit that the contractor cannot exceed, unless there is a risk of non-reimbursement. a) (1) Customer shall insert clause 52.216-7, Recoverable Fees and Payment, in claims and contracts if a cost reimbursement contract or a time and material contract (other than a contract for a commercial purpose) is considered. If the contract is a time and material contract, clause 52.216-7 in conjunction with clause 52.232-7 applies, but only to the part of the contract that provides for the reimbursement of materials (as defined in clause at 52.232-7) at actual cost. In addition, clause 52.216-7 does not apply to hourly employment contracts. In a CPFF period, the government usually enters into employment contracts for a certain period, usually one year. (i) the contract applies to the performance of research or exploration or preliminary studies and the effort required is unknown; Or In some type of CPFF completion, the government expects and has specified in the contract/TO/DO what to deliver at the end of the performance period, be it a prototype, study, report, etc. .