Under what contractual authority may a contractor request additional ceiling and funding when the contract is modified to include a WD with higher rates than were originally proposed. thank you! (help)
This answer is only based on the information provided and in the background it was stated this is a CPFF contract that was modified to include a new wage determination for the second option year. The modification will cover the addition costs of the required higher hourly rates. It does not mean the Contracting Officer has to modify the contract to increase the ceiling or funding level. For example if the old wage rate was $10.00 and you were paying $10.00 and now the new wage rate is $10.50 and you are now paying $10.50 the Government will pay $10.50.
You mentioned providing the Contracting Officer with a new estimate to complete based on the new wage rates. FAR 52.232-20 Limitation of Cost states (b) The Contractor shall notify the Contracting Officer in writing whenever it has reason to believe that- (1) The costs the contractor expects to incur under this contract in the next 60 days, when added to all cost previously incurred, will exceed 75 percent of the estimated cost specified in the Schedule. Then in (d)(1) The Government is not obligated to reimburse the Contractor for cost incurred in excess of (i) the estimated cost specified in the Schedule and in (2) The Contractor is not obligated to continue performance under this contract or otherwise incur costs in excess of the estimated cost specified in the Schedule, until the Contracting Officer (i) notifies the Contractor in writing that the estimated cost has been increased and (ii) provides a revised estimated total cost of performing this contract. If a notice is not given by the Contracting Officer the Government is not obligated to reimburse the Contractor for any costs in excess of the estimated cost.
So you can see from this clause the Contracting Officer does not have to increase the estimated cost.