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  • Question

    Does the "additional fee" noted in FAR 52.246-5(d) refer to fee (fixed fee/incentive fee) or does it mean cost?" The clause states: "FAR 52.246-5(d) If any of the services performed do not conform with contract requirements, the Government may require the Contractor to perform the services again in conformity with contract requirements, for no additional fee."


    The first step is to see if fee is defined in clause 52.246-5 itself, which it is not. Then we go to FAR part 46 that prescribes the use of the clause and fee is not defined there. The prescription for the clause does not speak to this matter. So we go to the definitions in FAR 15.401, which applies to contract pricing, and it defines price as cost plus any fee applicable to the contract type. Cost and fee are considered two different elements of pricing. Looking at the context of the clause, only fee is mentioned and not cost. Therefore it is recommended when using clause 52.246-5 to only not allow fee in cases when the Contractor has to perform the services again that did not conform with contract requirements. 

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