FAR 52.216-16 Incentive Price Revision—Firm Target. Basic (Oct 1997)

As prescribed in 16.406(a), insert the clause at 52.216-16, Incentive Price Revision—Firm Target, in solicitations and contracts when a fixed-price incentive (firm target) contract is contemplated. If the contract calls for supplies or services to be ordered under a provisioning document or Government option and the prices are to be subject to the incentive price revision under the clause, the contracting officer shall use the clause with its Alternate I.

Incentive Price Revision—Firm Target (Oct 1997)

(a) General. The supplies or services identified in the Schedule as Items _______ [Contracting Officer insert Schedule line item numbers] are subject to price revision in accordance with this clause; provided, that in no event shall the total final price of these items exceed the ceiling price of ________ dollars ($_____). Any supplies or services that are to be (1) ordered separately under, or otherwise added to, this

contract and (2) subject to price revision in accordance with the terms of this clause shall be identified as such in a modification to this contract.

(b) Definition. “Costs,” as used in this clause, means allowable costs in accordance with Part 31of the Federal Acquisition Regulation (FAR) in effect on the date of this contract.

(c) Data submission.

    (1) Within __________________ [Contracting Officer insert number of days] days after the end of the month in which the Contractor has delivered the last unit of supplies and completed the services specified by item number in paragraph (a) of this clause, the Contractor shall submit in the format of Table 15-2, FAR 15.408, or in any other form on which the parties agree—

        (i) A detailed statement of all costs incurred up to the end of that month in performing all work under the items;

        (ii) An estimate of costs of further performance, if any, that may be necessary to complete performance of all work under the items;

        (iii) A list of all residual inventory and an estimate of its value; and

        (iv) Any other relevant data that the Contracting Officer may reasonably require.

    (2) If the Contractor fails to submit the data required by paragraph (c)(1) of this clause within the time specified and it is later determined that the Government has overpaid the Contractor, the Contractor shall repay the excess to the Government immediately. Unless repaid within 30 days after the end of the data submittal period, the amount of the excess shall bear interest, computed from the date the data were due to the date of repayment, at the rate established in accordance with the Interest clause.

(d) Price revision. Upon the Contracting Officer’s receipt of the data required by paragraph (c) of this clause, the Contracting Officer and the Contractor shall promptly establish the total final price of the items specified in (a) of this clause by applying to final negotiated cost an adjustment for profit or loss, as follows:

    (1) On the basis of the information required by paragraph (c) of this clause, together with any other pertinent information, the parties shall negotiate the total final cost incurred or to be incurred for supplies delivered (or services performed) and accepted by the Government and which are subject to price revision under this clause.

    (2) The total final price shall be established by applying to the total final negotiated cost an adjustment for profit or loss, as follows:

        (i) If the total final negotiated cost is equal to the total target cost, the adjustment is the total target profit.

        (ii) If the total final negotiated cost is greater than the total target cost, the adjustment is the total target profit, less ______ [Contracting Officer insert percent] percent of the amount by which the total final negotiated cost exceeds the total target cost.

        (iii) If the final negotiated cost is less than the total target cost, the adjustment is the total target profit plus _____ [Contracting Officer insert percent] percent of the amount by which the total final negotiated cost is less than the total target cost.

(e) Contract modification. The total final price of the items specified in paragraph (a) of this clause shall be evidenced by a modification to this contract, signed by the Contractor and the Contracting Officer. This price shall not be subject to revision, notwithstanding any changes in the cost of performing the contract, except to the extent that—

    (1) The parties may agree in writing, before the determination of total final price, to exclude specific elements of cost from this price and to a procedure for subsequent disposition of those elements; and

    (2) Adjustments or credits are explicitly permitted or required by this or any other clause in this contract.

(f) Adjusting billing prices.

    (1) Pending execution of the contract modification (see paragraph (e) of this clause), the Contractor shall submit invoices or vouchers in accordance with billing prices as provided in this paragraph. The billing prices shall be the target prices shown in this contract.

    (2) If at any time it appears from information provided by the contractor under paragraph (g)(2) of this clause that the then-current billing prices will be substantially greater than the estimated final prices, the parties shall negotiate a reduction in the billing prices. Similarly, the parties may negotiate an increase in billing prices by any or all of the difference between the target prices and the ceiling price, upon the Contractor’s submission of factual data showing that final cost under this contract will be substantially greater than the target cost.

    (3) Any billing price adjustment shall be reflected in a contract modification and shall not affect the determination of the total final price under paragraph (d) of this clause. After the contract modification establishing the total final price is executed, the total amount paid or to be paid on all invoices or vouchers shall be adjusted to reflect the total final price, and any resulting additional payments, refunds, or credits shall be made promptly.

(g) Quarterly limitation on payments statement. This paragraph (g) shall apply until final price revision under this contract has been completed.

    (1) Within 45 days after the end of each quarter of the Contractor’s fiscal year in which a delivery is first made (or services are first performed) and accepted by the Government under this contract, and for each quarter thereafter, the Contractor shall submit to the contract administration office (with a copy to the contracting office and the cognizant contract auditor) a statement, cumulative from the beginning of the contract, showing—

        (i) The total contract price of all supplies delivered (or services performed) and accepted by the Government and for which final prices have been established;

        (ii) The total costs (estimated to the extent necessary) reasonably incurred for, and properly allocable solely to, the supplies delivered (or services performed) and accepted by the Government and for which final prices have not been established;

        (iii) The portion of the total target profit (used in establishing the initial contract price or agreed to for the purpose of this paragraph (g)) that is in direct proportion to the supplies delivered (or services performed) and accepted by the Government and for which final prices have not been established—increased or decreased in accordance with paragraph (d)(2) of this clause, when the amount stated under subdivision (g)(1)(ii) of this clause differs from the aggregate target costs of the supplies or services; and

        (iv) The total amount of all invoices or vouchers for supplies delivered (or services performed) and accepted by the Government (including amounts applied or to be applied to liquidate progress payments).

    (2) Notwithstanding any provision of this contract authorizing greater payments, if on any quarterly statement the amount under subdivision (g)(1)(iv) of this clause exceeds the sum due the Contractor, as computed in accordance with subdivisions (g)(1)(i), (ii), and (iii) of this clause, the Contractor shall immediately refund or credit to the Government the amount of this excess. The Contractor may, when appropriate, reduce this refund or credit by the amount of any applicable tax credits due the Contractor under 26 U.S.C. 1481 and by the amount of previous refunds or credits effected under this clause. If any portion of the excess has been applied to the liquidation of progress payments, then that portion may, instead of being refunded, be added to the unliquidated progress payment account consistent with the Progress Payments clause. The Contractor shall provide complete details to support any claimed reductions in refunds.

    (3) If the Contractor fails to submit the quarterly statement within 45 days after the end of each quarter and it is later determined that the Government has overpaid the Contractor, the Contractor shall repay the excess to the Government immediately. Unless repaid within 30 days after the end of the statement submittal period, the amount of the excess shall bear interest, computed from the date the quarterly statement was due to the date of repayment, at the rate established in accordance with the Interest clause.

(h) Subcontracts. No subcontract placed under this contract may provide for payment on a cost-plus-a-percentage-of-cost basis.

    (i) Disagreements. If the Contractor and the Contracting Officer fail to agree upon the total final price within 60 days (or within such other period as the Contracting Officer may specify) after the date on which the data required by paragraph (c) of this clause are to be submitted, the Contracting Officer shall promptly issue a decision in accordance with the Disputes clause.

    (j) Termination. If this contract is terminated before the total final price is established, prices of supplies or services subject to price revision shall be established in accordance with this clause for (1) completed supplies and services accepted by the Government and (2) those supplies and services not terminated under a partial termination. All other elements of the termination shall be resolved in accordance with other applicable clauses of this contract.

    (k) Equitable adjustment under other clauses. If an equitable adjustment in the contract price is made under any other clause of this contract before the total final price is established, the adjustment shall be made in the total target cost and may be made in the maximum dollar limit on the total final price, the total target profit, or both. If the adjustment is made after the total final price is established, only the total final price shall be adjusted.

    (l) Exclusion from target price and total final price. If any clause of this contract provides that the contract price does not or will not include an amount for a specific purpose, then neither any target price nor the total final price includes or will include any amount for that purpose.

    (m) Separate reimbursement. If any clause of this contract expressly provides that the cost of performance of an obligation shall be at Government expense, that expense shall not be included in any target price or in the total final price, but shall be reimbursed separately.

    (n) Taxes. As used in the Federal, State, and Local Taxes clause or in any other clause that provides for certain taxes or duties to be included in, or excluded from, the contract price, the term “contract price” includes the total target price or, if it has been established, the total final price. When any of these clauses requires that the contract price be increased or decreased as a result of changes in the obligation of the Contractor to pay or bear the burden of certain taxes or duties, the increase or decrease shall be made in the total target price or, if it has been established, in the total final price, so that it will not affect the Contractor’s profit or loss on this contract.

(End of clause)

NONE. (h) Subcontracts. No subcontract placed under this contract may provide for payment on a cost-plus-a-percentage-of-cost basis.

Prime’s Interest;
C/R ✖ Time and Materials ✖ FFP ✖ 

52.215-21 Requirements for Certified Cost or Pricing Data and Data Other Than Certified Cost or Pricing Data—Modifications.

52.216-2 Economic Price Adjustment—Standard Supplies.

52.216-3 Economic Price Adjustment—Semistandard Supplies.

52.216-4 Economic Price Adjustment—Labor and Material.

52.216-5 Price Redetermination—Prospective.

52.216-6 Price Redetermination—Retroactive.

52.222-30 Construction Wage Rate Requirements—Price Adjustment (None or Separately Specified Method).

52.222-31 Construction Wage Rate Requirements—Price Adjustment (Percentage Method).

52.222-32 Construction Wage Rate Requirements—Price Adjustment (Actual Method).

52.222-43 Fair Labor Standards Act and Service Contract Labor Standards—Price Adjustment (Multiple Year and Option Contracts).

52.222-44 Fair Labor Standards Act and Service Contract Labor Standards—Price Adjustment.

52.222-55 Minimum Wages Under Executive Order 13658.

52.229-4 Federal, State, and Local Taxes (State and Local Adjustments).

52.229-6 Taxes—Foreign Fixed-Price Contracts.

52.232-31 Invitation to Propose Financing Terms.

52.233-3 Protest after Award.

52.236-2 Differing Site Conditions.

52.242-14 Suspension of Work.

52.242-15 Stop-Work Order.

52.243-1 Changes—Fixed-Price.

52.243-2 Changes—Cost-Reimbursement.

52.243-3 Changes—Time-and-Materials or Labor-Hours.

52.243-4 Changes.

52.243-5 Changes and Changed Conditions.

52.243-7 Notification of Changes.

52.250-5 SAFETY Act—Equitable Adjustment.

252.216-7000 Economic Price Adjustment—Basic Steel, Aluminum, Brass, Bronze, or Copper Mill Products.

252.216-7001 Economic Price Adjustment–Nonstandard Steel Items.

252.216-7003 Economic Price Adjustment—Wage Rates or Material Prices Controlled by a Foreign Government.

252.216-7007 Economic Price Adjustment—Basic Steel, Aluminum, Brass, Bronze, or Copper Mill Products—Representation.

252.216-7008 Economic Price Adjustment—Wage Rates or Material Prices Controlled by a Foreign Government—Representation.

252.217-7003 Changes.

252.217-7027 Contract Definitization.

252.227-7002 Readjustment of Payments.

252.232-7000 Advance Payment Pool.

252.232-7012 Performance-Based Payments–Whole-Contract Basis.

252.236-7003 Payment for Mobilization and Preparatory Work.

252.236-7004 Payment for Mobilization and Demobilization.

252.237-7023 Continuation of Essential Contractor Services .

252.239-7004 Orders for Facilities and Services.

252.241-7000 Superseding Contract.

252.243-7001 Pricing of Contract Modifications.

252.243-7002 Requests for Equitable Adjustment.

252.247-7000 Hardship Conditions.

252.247-7002 Revision of Prices.

252.249-7000 Special Termination Costs.

1852.215-79 Price Adjustment for "Make-or-Buy" Changes.

1852.242-72 Denied Access to NASA Facilities

1852.243-72 Equitable Adjustments.

5252.211-9503 LEVEL OF EFFORT (COST REIMBURSEMENT) (NAVAIR)(DEC 2012)

5252.243-9505 ENGINEERING CHANGES (NAVAIR)

5252.227-9505 TECHNICAL DATA AND COMPUTER SOFTWARE IDENTIFICATION IN ENGINEERING CHANGE PROPOSALS (ECPs) (NAVAIR)

5252.242-9515 RESTRICTION ON THE DIRECT CHARGING OF MATERIAL (VARIATION)

5252.216-9200 Payment of Fixed Fee (Completion Type)

5252.216-9201 Payment of Fixed Fee Based on Staff-hours (Term Type)

5252.216-9205 Fee Determination and Payment (Indefinite Delivery Type Contracts)

5252.217-9201 Contract Maximum Amount

3052.216-70 Evaluation of offers subject to an economic price adjustment clause.

3052.216-71 Determination of award fee.

3052.231-70 Precontract costs.

5152.237-9000 Adjustments to Contractor’s Coefficient for Option Years (Job Order Contracts).

552.215-72 Price Adjustment—Failure to Provide Accurate Information.

552.216-70 Economic Price Adjustment—FSS Multiple Award Schedule Contracts.

552.216-71 Economic Price Adjustment—Special Order Program Contracts.

552.243-71 Equitable Adjustments.

552.246-70 Source Inspection by Quality Approved Manufacturer.

552.246-77 Additional Contract Warranty Provisions for Supplies of a Noncomplex Nature.

652.216-71 Price Adjustment.

652.237-70 Compensatory Time Off.

652.237-72 Observance of Legal Holidays and Administrative Leave.

952.204-76 Conditional payment of fee or profit—safeguarding restricted data and other classified information.

952.208-70 Printing.

952.216-7 Allowable cost and payment.

952.216-15 Predetermined indirect cost rates.

952.223-76 Conditional payment of fee or profit—safeguarding restricted data and other classified information and protection of worker safety and health.

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