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  • Question

    DFARS 215.404-71-4)d)(1)(i) says: (1) Cost of Money. (i) Cost Objective. Use the imputed facilities capital cost of money, with normal, booked costs, to establish a cost objective or the target cost when structuring an incentive type contract. Do not adjust target costs established at the outset even though actual cost of money rates become available during the period of contract performance. Normally when using WGL we do not include FCCOM in TC to calculate the Fee percentage/dollars. For a CPIF contract is this different? This DFARS reference is noted in the DAU provided calculator for Incentive contracts.


    Answer

    You might review, Volume 3, Chapter 10, of the Cost and Pricing Reference Guides, CPRG.

    When it comes to cost type contracts, you should consider all the elements that make up the cost - which includes FCCOM; therefore you would include it in your Target Cost and min/max fee calculations.

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