I have 3 questions:
Question 1: Regarding the Working Capital Adjustment Contract Length Factor, my working group understood why option years are not included in the contract length factor, however; they didn't understand why, for multiyear efforts, to only
include the first year. Can you shed any light on this?
Question 2: In the Cost Efficiency Factor in the Weighted Guidelines, it is my understanding that costs savings should be shared with the Government. In an FFP contract, what are the typical cost savings share ratios between the Government and Contractor since the FFP contract is riskier to the contractor. Do you give them the full cost savings if the cost savings is equal or less than 4% of the total contract costs, or do you still share the costs just in case not all of them are realized?
Question 3: In a UCA, we divide the portion of the total contract costs between Actual Costs Incurred and Estimate to Complete and assigned a Contract Type Risk percentage to each, and the final percent in the WG form is the Weighted Average of both. Would you ever assign more than a 0% Contract Type Risk to the Actual Costs Incurred portion? The majority of my working group stated that it always should be 0%, because the costs have already incurred and there is no risk. Others state that if it's the Government's fault that the award was delayed, you can give higher than 0% to the ACI portion.
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1. The DFARS does not state why only the first year of a multiyear contract is included in the length factor of weighted guidelines, but it could be because congress may not fund past the first year.
2. From what you wrote it sounds like you might not be clear on what a firm fixed price (FFP) contract is since you mentioned share ratios. FFP do not have share ratios. If the contractor is able to reduce their costs, they keep all of the savings. Please read DFARS 215.404-71-5 and pay particular attention to paragraph (c).
3. The answer for your third question is similar to answer 2, you need to read the DFARS. Read DFARS 215.404-71-3 (d)(2)(i) When costs have been incurred prior to definitization, generally regard the contract type risk to be in the low end of the designated range. If a substantial portion of the costs have been incurred prior to definitization, the contracting officer may assign a value as low as 0 percent, regardless of contract type.