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  • Question

    If the contractor states additional hours are needed in order to complete work on a CPFF requirements task order, and the COR agrees with the additional hours, should these additional hours be allowed? What regulation supports allowing additional hours?


    Answer

    To answer your question.  Yes.  Your COR should provide you an evaluation of the reasonableness of the contractor's bases for the additional hours. With COR concurrence and Contracting Officer approval, you should add additional hours and dollars on the contract to complete the in-scope work. 
     
    On a CPFF contract, you are acquiring the contractor's best effort.  According to FAR 52.232-20 "Limitation of Cost" clause or FAR 52.232-22 "Limitation of Funds" clause,  the performance of the contract, exclusive of any fee, will not cost the Government more than the estimated cost (or the government's share) specified in the contract.
     
    The Contractor shall notify the Contracting Officer in writing when Costs in the next 60 days, when added to all costs previously incurred, will exceed 75% of the estimated cost in the Schedule. The 60-day period may be varied from 30 to 90 days and the 75 percent from 75 to 85 percent.
     
    The Contractor must also notify the Government when total cost for contract performance, exclusive of any fee, will be either greater or substantially less than previously estimated and provide a revised estimate of total cost.
     
    The Government is not obligated to reimburse Contractor for costs incurred in excess of estimated schedule cost. Most importantly, the contractor is not obligated to continue contract performance until the Contracting Officer notifies the contractor that the estimated cost has been increased and provide a revised estimated total cost.
     
    Thus, it appears to me that your Contractor is following the FAR 52.232-20 or FAR 52.232.22 requirements by notifying you that they need additional hours to complete the contract.


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