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  • Question

    My read of FAR 15.404-4 does not speak to the actual color of money being used, rather directly to the description and scope of work being accomplished. In 15.404-4(b)(4)(i)(A), the work is described as experimental, developmental, or research work. This work being executed has already been accomplished on an FMS platform and is not considered "experimental" or "research," the only action work point to "developmental" is the color of money. Government Position: 15.404-4(b)(4)(i)(C) applies. Contractor Position: 15.404-4(b)(4)(i)(A) applies. Please provide your read or any applicable precedence. Can I fund with R&D, but hold the contractor statutorily to a 10% fee ceiling?


    Answer

    The currently state that reference provided at FAR 15.404-4(b)(4)(i)(A) states that the for experimental, developmental, or research work performed under a cost-plus fixed-fee contract, the fee shall not exceed 15 percent of the contract's estimated cost.  If you are at 10% you are well within the limits.  The reference does not stipulate a 15% fee.

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