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    What FAR or DFAR clause(s) allows me to add additional funds and increase the estimated cost of a CPFF contract type CLIN?


    Answer

    The answer depends upon whether you are modifying your contract to add new work or if you are funding your contract because the current scope of work needs additional funding.  Possibly you plan to do both.
     

    If you are just funding the contract, (the scope of work hasn’t changed), you should use the Limitation of Funds or the Limitation of Cost clause.  One or the other is in your contract.  Which clause depends  upon whether you are incrementally funding your contract or if you are fully funding your contract.  FAR 32.704 (see below) explains that you do a funding modification using the authority of the Limitation of Cost or Limitation of Funds clause. Regardless of which clause you use, you can add the funding and modify the estimated cost, as necessary.   
    32.706-2 -- Clauses for Limitation of Cost or Funds.
    (a) The contracting officer 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.
    (b) The contracting officer shall insert the clause at 52.232-22, Limitation of Funds, in solicitations and contracts if an incrementally funded cost-reimbursement contract is contemplated.

    32.704 -- Limitation of Cost or Funds.

    (a)
    (1) When a contract contains the clause at 52.232-20, Limitation of Cost; or 52.232-22, Limitation of Funds, the contracting officer, upon learning that the contractor is approaching the estimated cost of the contract or the limit of the funds allotted, shall promptly obtain funding and programming information pertinent to the contract’s continuation and notify the contractor in writing that --
    (i) Additional funds have been allotted, or the estimated cost has been increased, in a specified amount;
    (ii) The contract is not to be further funded and that the contractor should submit a proposal for an adjustment of fee, if any, based on the percentage of work completed in relation to the total work called for under the contract;
    (iii) The contract is to be terminated; or
    (iv)(A) The Government is considering whether to allot additional funds or increase the estimated cost, B) The contractor is entitled by the contract terms to stop work when the funding or cost limit is reached; and(C) Any work beyond the funding or cost limit will be at the contractor’s risk.
    If you need to modify the contract because you are adding more work, then you should be using the Changes Clause for Cost Reimbursement Contracts, FAR 52.243-2, most likely, to justify the additional work.  You will fund the modification using the Limitation of Funds or Limitation of Cost clauses.  
    52.243-2 -- Changes -- Cost-Reimbursement.
    As prescribed in 43.205(b)(1), insert the following clause. The 30-day period may be varied according to agency procedures.
    Changes -- Cost-Reimbursement (Aug 1987)
    (a) The Contracting Officer may at any time, by written order, and without notice to the sureties, if any, make changes within the general scope of this contract in any one or more of the following:
    (1) Drawings, designs, or specifications when the supplies to be furnished are to be specially manufactured for the Government in accordance with the drawings, designs, or specifications.
    (2) Method of shipment or packing.
    (3) Place of delivery.
    (b) If any such change causes an increase or decrease in the estimated cost of, or the time required for, performance of any part of the work under this contract, whether or not changed by the order, or otherwise affects any other terms and conditions of this contract, the Contracting Officer shall make an equitable adjustment in the --
    (1) Estimated cost, delivery or completion schedule, or both;
    (2) Amount of any fixed fee; and
    (3) Other affected terms and shall modify the contract accordingly.
    (c) The Contractor must assert its right to an adjustment under this clause within 30 days from the date of receipt of the written order. However, if the Contracting Officer decides that the facts justify it, the Contracting Officer may receive and act upon a proposal submitted before final payment of the contract.
    (d) Failure to agree to any adjustment shall be a dispute under the Disputes clause. However, nothing in this clause shall excuse the Contractor from proceeding with the contract as changed.
    (e) Notwithstanding the terms and conditions of paragraphs (a) and (b) above, the estimated cost of this contract and, if this contract is incrementally funded, the funds allotted for the performance of this contract, shall not be increased or considered to be increased except by specific written modification of the contract indicating the new contract estimated cost and, if this contract is incrementally funded, the new amount allotted to the contract. Until this modification is made, the Contractor shall not be obligated to continue performance or incur costs beyond the point established in the Limitation of Cost or Limitation of Funds clause of this contract.
     

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