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  • Question

    What FAR or DFARS authority to use to deob excess funds from a firm fixed price type contract?


    Answer

    In the case of Firm Fixed Price contracts (FAR 16.202) there must first be a reason the contractor is not performing the work for the agreed upon price. According to FAR 16.202-1, a firm-fixed-price contract is described as providing for a price that is not subject to any adjustment on the basis of the contractor’s cost experience in performing the contract. Unlike other contract types in the Fixed Price family (FAR Subpart 16.2) that can be flexibly priced for various reasons, the Firm Fixed Price contract cannot be adjusted without some sort of FAR Part 49 termination. 
     
    FAR 49.000 -- Scope of Part states: This part establishes policies and procedures relating to the complete or partial termination of contracts for the convenience of the Government or for default. It prescribes contract clauses relating to termination and excusable delay and includes instructions for using termination and settlement forms. 
     
    Once the contracting officer has established the reason for disturbing the Firm Fixed Price contract terms and conditions, the actual deobligation proceeds in accordance with the contract terms and conditions, and FAR Part 42,
    DFARS 242, and agency contract administration procedures.


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