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    Does target cost include or exclude FCCOM (COM) for the calculation of ceiling price?


    COM is an allowable charge for a contractor to bill the government provided the contract language explicitly indicates the contractor will use COM.

    So, it is part of the calculation for total price.  However, the contractor should not get fee or profit based on COM dollars.  

    In other words, if applying a percentage to "all costs" you would not include COM in the base that the percentage is applied upon.  However COM is a Cost that a Contractor can get reimbursed for so you need to add that back into the value to get your final answer.

    To make an oversimplified math equation:

    Total Price = COM +((allowable costs - COM)* Percentage).  Do not construe this equation as complete and eternally correct, it was only put together in the context of Cost of Money and your question.

    There are, of course, may be exceptions in contract language and/or DFARs clauses invoked; therefore you should contact your programs Contracting office to ensure you correctly grasp the applicable language.



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