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    A few years ago, I came across a clear definition of the difference between Point of Total Assumption and Ceiling price on your website. It was a verbal definition that was the most clear of any I had heard. I have looked on your web site and cannot find it. Could you look and see if you could find it please? I believe it was dated between 2006-2008. I would appreciate it.


    Answer

    Not sure if this is the reference you were asking about but there is a similar Ask a Professor question from 2008 that provides a good definition and the full text can be found at the following location:
    https://dap.dau.mil/aap/pages/qdetails.aspx?cgiSubjectAreaID=29&cgiQuestionID=23561
     
    A summary of the key point is below

    The Ceiling Price on an FPIF contract is the maximum price (cost plus profit) that the Government will pay on that contract.  The Point of Total Assumption (PTA) is the point along the cost line where the share ratio changes to 0/100, or to a FFP contract arrangement (i.e., the contractor assumes all of the costs and the share ratio is no longer being applied).  The contractor is still earning a profit, however it is reduced dollar by dollar until the total cost EQUALS the Ceiling Price, thereafter the contractor begins to lose money.

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