If all hours on a CPFF contract are not delivered prior to a contractor successfully completing an effort; is the entire fee still due/payable? Does it matter if the contract type is CPFF Term, or CPFF Completion?
Let’s start by answering the 2nd question dealing with the form of the Cost Plus Fixed Fee contract.
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Far 16.306 (d) describe the two basic forms of Cost Plus Fixed Fee type contracts; the completion form and the term form.
Under the completion form as identified in FAR 16.306 (d) (1), the scope of work is described by identifying a “definite goal or target and specifying an end product” that the contractor is required to deliver within the estimated cost, “if possible” in order to receive the entire fixed fee. If the work cannot be completed within the estimated cost, the Government may decide to increase the estimated cost, thus allowing the contractor the opportunity to complete the work, but without an increase in the fixed fee amount as stipulated in the contract.
Under the term form, as described in FAR 16.306 (d) (2), the scope of work is described in general terms and the contractor is required to provide a “specified level of effort for a stated time period.” So long as the Government finds the contractor’s performance satisfactory, the fixed fee as stated in the contract, is payable after the “agreed-upon period” has elapsed and “upon contractor statement that the level of effort specified in the contract has been expended in performing the contract work.”
FAR 16.307 (b) requires the use of the clause at 52.216-8 – Fixed Fee. This clause is operative in answering the first question concerning the amount of fee payable. The fixed fee clause stipulates: ” (a) The Government shall pay the Contractor for performing this contract the fixed fee specified in the Schedule.” As such the amount of fee payable under this contract shall be in accordance with the contract schedule. If the schedule is not specific enough to make the appropriate determination, consult with the Contracting Officer for clarity and further interpretation.