![]() However, if changes were negotiated from the budget that was in the proposal or bid, the budget should be revised to reflect the changes and should be included in the contract. ![]() The contract may include the line item budget that was submitted in the selected proposal or bid by reference to that proposal or bid, if it was not changed by contract negotiations. personnel, space, travel, etc.) needed to undertake the work are to be listed, priced, and allocated among applicable cost categories. In satisfying the budget requirement, the resources (i.e. The Agency requires that cost reimbursement contracts identify the number of participants covered by the agreement, if applicable and include a line-item budget showing the planned costs by cost category. Where it might be considered unwise to attempt to characterize or prescribe details of an outcome (such as research and development tasks or work experience programs).When the work desired cannot be precisely detailed as to permit the expectation of a common understanding of results.In general, a cost reimbursement contract is used: A cost reimbursement contract may also be used with other types of subcontractors. The Agency requires that cost reimbursement contracts be used for contracts between units of state and local governments, and contracts between a Contractor and their administrative entity. Types of cost reimbursement contracts include: cost contracts, cost sharing contracts, cost-plus-incentive-fee contracts, cost-plus-award-fee contracts, and cost-plus-fixed-fee contracts. Thus, the Contractor, as the paying entity, bears the primary risk under this type of contract. Compensating a subcontractor at cost does not provide an incentive for the subcontractor to control costs or to provide goods or services in the most effective manner. Since compensation is made on a level of effort basis, payments are earned based on actual allowable costs incurred and reported by the subcontractor (up to a negotiated ceiling i.e., budget). ![]() Under a cost reimbursement contract, the Contractor compensates its subcontractor for performing at a certain level of effort, regardless of the level of output achieved. ![]() Instead it addresses general requirements applicable to these two categories of contracts. With the exception of fixed unit price performance based contracts and fixed unit price non-performance base contracts, this manual does not describe the specific types of contracts that fall within these two broad categories. These two broad categories also include incentive type contracts. Specific contract types within these categories range from firm-fixed-price to cost-plus-fixed-fee contracts. This section conforms to the Federal Acquisition Regulation in that it groups these contracts into two broad categories: fixed price and cost reimbursement contracts. The type of contract used should coincide with 1) the degree and timing of responsibility assumed by the subcontractor for costs, and 2) the amount and nature of the profit incentive offered for achieving or exceeding specified standards or goals (if applicable).Ĭontractors may choose from a wide variety of contracts to acquire goods and services. The cost plus a percentage of cost and cost plus a percentage of construction methods shall not be used in contracting of federal or state funds. All financial and programmatic records, supporting documents, statistical records, and other records pertaining to an award of federal or state funds must be retained and made available to authorized entities or their representatives in accordance with applicable administrative requirements. Record retention and access requirements are provided in Appendix K to this manual. In the event of conflict between these standards and federal statute or regulation, federal statute or regulation will apply. The federal, state and agency requirements for contracts of federal or state funds are compiled in this chapter. Though not specifically required by federal regulations, each of these components must be present for the existence of a valid contract. These four elements are: 1) manifestation of mutual assent, 2) consideration, 3) legality of object, and 4) capacity of the parties. Supreme Court decisions have upheld the validity of four essential components of a contract, as published by the American Law Institute.
0 Comments
Leave a Reply. |