Sign In
  • Question

    Is there any guidance as to the applicability, appropriateness or prohibition to using cost sharing on a FAR-based fixed price incentive contract? Is there an opportunity to structure a cost-share with industry which mirrors somewhat the cost sharing that is available to OTA arrangements?


    Answer

    I checked in with some of our innovators in the field and here are some thoughts for you to consider.   FAR part 16 prescribes the use of cost-plus-incentive-fee or cost-plus-award-fee contracts where you could work in the cost-share piece.

    If you want to go FPIF (which is disfavored due to complexity), the whole point is that you are negotiating a fixed price.

    Forget about cost-share. Ask the company to provide part of the effort “in-kind”; segregate that out and label it the “cost-share”; then negotiate FPIF for the remainder of the effort.

    Please keep in mind that the above contract types are complex to administer and the value of the procurement action would warrant the amount of complexity being baked in to the contract strategy.

    Open full Question Details