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  • Question

    My question is to avoid the 10 percent fee reserve from Canceling at the end of Fiscal Year can the Contracting Officer allow the Contractor to bill up to 100 percent instead of 90 percent so the Contractor will not have to attempt to obtain replacement funds once the contract is almost ready to close out, since the contract is physically complete? Is that stated anywhere in the FAR? Thanks.


    Answer

    FAR 52.216-8 (b): Fixed Fee requires for Cost Plus Fixed Fee contracts, to protect the Government’s interest that the ACO will withhold up to 15% of fee or $100,000 (whichever is less).  ACO may release 75% of fee withheld when the contractor has submitted an adequate final indirect rate proposal, the contractor has satisfied all other contract terms and conditions and the contractor is not delinquent in submitting final vouchers.  ACO may release 90% of fee withholds when the contractor has submitted and settled the final indirect cost rate proposals.

    DCAA is the contractor officer representative and receives, reviews, and approves interim cost public vouchers and the ACO approves the final voucher.  DCMA Instruction 106, Public Voucher paragraph 2.4.1 states the ACO may approve other than final vouchers in order to administer canceling funds, resubmitted interim vouchers, and fee withholds. To answer your question, the ACO may release the amount of fee withholds if this money is at risk of canceling and will encourage the contractor to submit an interim voucher for the full fee amount.  This is not stated in the FAR but it is DCMA practice to pay the contractor money for which they are entitled so the buying offices will not have to use current year funds to pay old bills.

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