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  • Question

    What allows a contractor to incur costs beyond Delivery Date on an FPI Contract? Is there a requirement to negotiate an extension to the delivery date on an FPI contract, in order to allow the contract to continue work on the contract?


    Answer

    The contract continues to be in effect until the obligations of both the contractor and Government have been met, or until one party releases the other from the terms and conditions. So, a contractor can incur valid and recognizable costs beyond the stated delivery date of the contract. However, it does so at its own risk if the Government has not issued a modification to formally extend the delivery date. Your DCAA contact apparently has a different view, so you should consult with your organization's legal counsel for an authoritative response.

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