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  • Question

    THAT 27% FEE MUST BE A TYPOGRAPHICAL ERROR THAT NOBODY CAUGHT DURING THE ACTIVE LIFE OF THE CONTRACT. WHAT REMEDY CAN BE SOUGHT AFTER THE FACT IF THE PROFIT IN A GOVERNMENT CONTRACT EXCEEDS THE STATUTORY MAXIMUM?


    Answer

    There are a couple of possibilities here for you to consider: if there is any money left you could offset that amount as part of the final payment once the rates are finalized.  Another course of action would be to issue a demand letter to the contractor (if they are even still in business) for repayment to the government of the 12% or so of the fixed fee that is excessive and that is in direct violation of the fee limit set in FAR 15.404-4 that you point out, based on the follow-up information that you sent me regarding the original estimated cost and fixed fee that was put on contract. I would also consult legal counsel for any other possible alternatives.

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