(b) With the exception of contracts involving procurement costs (see 16.404 and 16.401 (e)), incentive contracts include target costs, target profits or fees and a formula for adjusting profits or fees that provides (within a price cap or a minimum and maximum fee) that provides: 2) The contract may contain technical incentives for performance where it is very likely that the necessary development of a larger system is feasible and the government has set performance targets. at least in general. This approach may also apply to other acquisitions if the use of cost and technical performance incentives is desirable and administratively feasible. (i) the contract applies to the performance of research or exploration or preliminary studies and the effort required is unknown; Or Understanding the type of government contracts you`re competing for can give you a better idea of what you need to be prepared for, the risk involved, and how to write a more compelling and competitive quote. (iii) describe how the contractor`s performance is measured against the criteria for assessing the award fee; (1) For proposed contracts that exceed the simplified acquisition threshold but do not exceed $750,000, the client`s certificate attesting that the justification is correct and complete to the best of the client`s knowledge and belief with respect to the order activity will serve as an approval, unless a higher level of approval is established in accordance with the Agency`s procedures. 16 600 Scope. Temporary and material contracts and hourly employment contracts are not fixed-price contracts. 16,601 temporary and material contracts. (a) definitions for the purposes of temporary and material contracts. Direct materials are materials that go directly into the final product or that are used or consumed directly in connection with the supply of the final product or service. Hourly rate means the tariff(s) prescribed in the contract for the payment of workers that meets the qualifications of the category of work of a category of work specified in the contract, which – (1) are provided by the contractor; (2) carried out by subcontractors; or (3) Transfer between business units, subsidiaries or affiliates of the Contractor under common control. Material means – (1) Direct Material, including Supplies, transferred between the Contractor`s divisions, subsidiaries or affiliates under common control; (2) subcontracts for supplies and ancillary services for which there is no class of work specified in the contract; (3) Other direct costs (e.B.
ancillary services for which there is no category of work specified in the contract, travel expenses, computer use costs, etc.); and (4) applicable indirect costs. (b) Description. A time and equipment contract provides for the purchase of supplies or services on the basis of – (1) direct hours of work at fixed hourly rates, which include wages, overhead, general and administrative expenses and profits; and (2) the actual costs of materials (except as provided in paragraphs 31.205-26(e) and (f)). (c) enforcement. A time and material contract can only be used if, at the time of placing the order, it is not possible to accurately estimate the extent or duration of the work or to anticipate costs with a reasonable degree of confidence. See 12.207 (b) for the use of temporary and in-kind contracts for certain commercial services. (1) State surveillance. A time and material contract does not provide the contractor with a positive incentive to profit for cost control or work efficiency. Therefore, adequate government monitoring of the contractor`s performance is necessary to provide reasonable assurance that efficient methods and effective cost controls are being applied. (2) Fixed hourly rates.
(i) The contract sets separate fixed hourly rates that include wages, overheads, general and administrative expenses and profits for each category of work (see 16,601 (f)(1)). (ii) For the acquisition of non-commercial goods awarded without reasonable price competition (see 15.403-1 (c) (1)), the contract shall fix separate fixed hourly rates, including wages, overheads, general and administrative costs and profits for each class of workers provided by (A) contractor (b) each subcontractor; and (C) any department, subsidiary or affiliate of the Contractor under common control. (iii) in the case of contracts not awarded in the context of competitive procedures, fixed hourly rates shall apply to services transferred under common control between the contractor`s divisions, subsidiaries or affiliated undertakings, unless they are exempted in accordance with point (2)(iv) of paragraph c of this Section. (A) Does not include the benefit of the transferring organization; but (B) May include the benefit to the prime contractor. .