Shouldn't a CPFF contract submit invoices on a SF1035? It is my belief that the auditor, going on the info provided by the SF1034 assumed this was a cost re-imbursable vehicle vice a CPFF(SF1035). In this scenarion is the governmet liable for payment of the cost over run?
FAR 16.301-1 – Descriptions. states, “Cost-reimbursement types of contracts provide for payment of allowable incurred costs, to the extent prescribed in the contract. These contracts establish an estimate of total cost for the purpose of obligating funds and establishing a ceiling that the contractor may not exceed (except at its own risk) without the approval of the contracting officer.” A cost plus fixed fee is a type of cost reimbursement contract.
During the performance of cost-reimbursement type contracts, the contractor is able to submit vouchers for cost-reimbursement, time and material (T&M), labor-hour (LH), and fees incurred based on the contract’s terms. Cost-reimbursement contracts, including T&M and LH contracts, must use Cost vouchers to bill.
(Cost vouchers are also referred to as invoices on occasion, although a “true” invoice refers to a request for payment for a delivered item (i.e. material inspection and receiving report).
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There are two forms used by a contractor to voucher all types of cost contracts outside of Wide Area Workflow (WAWF), Forms 1034, Public Vouchers for Purchases Other Than Personal, and 1035, Public Vouchers for Purchases Other Than Personal Continuation Sheet. The 1035 is used for additional information required by the ACO and/or DCAA. Depending on the type of cost contract (e.g., cost plus fixed fee, cost-sharing no fee, etc.) the required information may differ in format and content. Most vouchers today are submitted via WAWF and the specific forms are not used.
FAR 32.706-2 -- Clauses for Limitation of Cost or Funds. states the contracting officer (CO) shall insert the clause at 52.232-20, Limitation of Cost, in solicitations and contracts if a fully funded cost-reimbursement contract is contemplated, whether or not the contract provides for payment of a fee. Under FAR 52.232-20 -- Limitation of Cost, the Contractor must provide written notification to CO (with copy to ACO) if the costs the contractor expects to incur in next 60 days, when added to actuals, will exceed 75% of estimated cost in Schedule or total cost, exclusive of fee, will be either greater or substantially less than previously estimated. The Government is not obligated to reimburse the Contractor for costs incurred in excess of the estimated cost specified in the contract schedule. Also, the Contractor is not obligated to continue performance under this contract or otherwise incur costs in excess of the estimated cost specified in the contract schedule, until the Contracting Officer notifies the Contractor in writing that the estimated cost has been increased and provides a revised estimated total cost of performing this contract.
If the Contractor incurred costs in excess of the contract schedule and submitted a voucher and was paid for these costs, the Contractor has been overpaid and will reimburse the Government for the overpayment.