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    Does that mean the initial period is an FPRP CLIN with a firm fixed price or is the initial period a FFP CLIN and the following periods are FPRP? Another opinion in the office is that the subsequent periods are FPRP until the price is redetermined, in which case they convert to FFP. I understand they will end up with a firm fixed price when the price is redetermined. I'm just trying to figure out what the CLIN contract type should look like. Thanks for your help.


    Answer

    FAR Subpart 16.205-1, Description, stated the contractor receives a firm fixed price for a specified initial period of performance, with the price for later periods revised in an equitable manner based on variables agreed upon by the parties. It is to be used when it is possible to negotiate a fair and reasonable price for the initial period but not for later periods. With that determined by the FAR, one would use a FFP CLIN for the initial period of performance, and the periods of performance thereafter that require price redetermination would be identified as such where one may allow for a ceiling price. Negotiating the price redeterminations should be stated in the terms of the contract and, once negotiated the FPPR CLINS are set at a FFP amount.


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