Common use of Final Cost Proposal Clause in Contracts

Final Cost Proposal. The contract FCP must contain rates that are established at the time of the contract. One or more of the following methods must be used. First, the contract FCP may identify specified rates and direct costs that will be used later to build lump sums. Second, the contract FCP may identify unit costs and direct costs that will be used later to build lump sums. Third, the contract FCP may identify future work authorizations and corresponding lump sums. A work authorization may have more than one lump sum if each is associated with a distinct deliverable or group of deliverables. If lump sum work authorizations will be used, the contract FCP must contain detailed and negotiated unit costs or specified rates so that the lump sum for future work authorizations can be calculated with certainty on the basis of cost figures contained in the contract FCP, or it must contain a schedule of future work authorizations with their associated lump sums. Lump sum work authorizations may not be calculated on the basis of actual labor rates, overhead rates, fee, or direct costs because actual costs are not audited or adjusted under a lump sum contract. The basis for lump sums may not be left for negotiation at the time work authorizations are issued.

Final Cost Proposal. The contract FCP must contain rates that are established at the time of the contract. One or more of the following methods must be used. First, the contract FCP may identify specified rates and direct costs that will be used later to build lump sums. Second, the contract FCP may identify unit costs and direct costs that will be used later to build lump sums. Third, the contract FCP may identify future work authorizations and corresponding lump sums. A work authorization may have more than one lump sum if each is associated with a distinct deliverable or group of deliverables. If lump sum work authorizations will be used, the contract FCP must contain detailed and negotiated unit costs or specified rates so that the lump sum for future work authorizations can be calculated with certainty on the basis of cost figures contained in the contract FCP, or it must contain a schedule of future work authorizations with their associated lump sums. Lump sum work authorizations may not be calculated on the basis of actual labor rates, overhead rates, fee, or direct costs because actual costs are not audited or adjusted under a lump sum contract. The basis for lump sums may not be left for negotiation at the time work authorizations are issued.. DocuSign Envelope ID: 0D466823-ACAE-4FA7-905E-4FFAE3FE9198