SECTION 52.216-16
52.216-16 Incentive Price Revision - Firm Target.
52.216-16 Incentive Price Revision - Firm Target.
As prescribed in 16.406(a), insert the following clause:
Incentive Price Revision - Firm Target (OCT 1997)
(a) General. The supplies or services identified in theSchedule as Items ___ [Contracting Officer insert Schedule lineitem numbers] are subject to price revision in accordance withthis clause; provided, that in no event shall the totalfinal price of these items exceed the ceiling price of ___ dollars($___). Any supplies or services that are to be (1) orderedseparately under, or otherwise added to, this contract and (2)subject to price revision in accordance with the terms of thisclause shall be identified as such in a modification to thiscontract.
(b) Definition. Costs, as used in this clause, meansallowable costs in accordance with part 31 of the FederalAcquisition Regulation (FAR) in effect on the date of thiscontract.
(c) Data submission. (1) Within __ [ContractingOfficer insert number of days] days after the end of the monthin which the Contractor has delivered the last unit of supplies andcompleted the services specified by item number in paragraph (a) ofthis clause, the Contractor shall submit in the format of Table15-2, 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 ofthat month in performing all work under the items;
(ii) An estimate of costs of further performance, if any, thatmay be necessary to complete performance of all work under theitems;
(iii) A list of all residual inventory and an estimate of itsvalue; and
(iv) Any other relevant data that the Contracting Officer mayreasonably require.
(2) If the Contractor fails to submit the data required bysubparagraph (1) above within the time specified and it is laterdetermined that the Government has overpaid the Contractor, theContractor shall repay the excess to the Government immediately.Unless repaid within 30 days after the end of the data submittalperiod, the amount of the excess shall bear interest, computed fromthe date the data were due to the date of repayment, at the rateestablished in accordance with the Interest clause.
(d) Price revision. Upon the Contracting Officer'sreceipt of the data required by paragraph (c) above, theContracting Officer and the Contractor shall promptly establish thetotal final price of the items specified in (a) above by applyingto final negotiated cost an adjustment for profit or loss, asfollows:
(1) On the basis of the information required by paragraph (c)above, together with any other pertinent information, the partiesshall negotiate the total final cost incurred or to be incurred forsupplies delivered (or services performed) and accepted by theGovernment and which are subject to price revision under thisclause.
(2) The total final price shall be established by applying tothe total final negotiated cost an adjustment for profit or loss,as follows:
(i) If the total final negotiated cost is equal to the totaltarget cost, the adjustment is the total target profit.
(ii) If the total final negotiated cost is greater than thetotal target cost, the adjustment is the total target profit, less___ [Contracting Officer insert percent] percent of theamount by which the total final negotiated cost exceeds the totaltarget cost.
(iii) If the final negotiated cost is less than the total targetcost, the adjustment is the total target profit plus ___[Contracting Officer insert percent] percent of the amountby which the total final negotiated cost is less than the totaltarget cost.
(e) Contract modification. The total final price of theitems specified in paragraph (a) above shall be evidenced by amodification to this contract, signed by the Contractor and theContracting 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 determinationof total final price, to exclude specific elements of cost fromthis price and to a procedure for subsequent disposition of thoseelements; and
(2) Adjustments or credits are explicitly permitted or requiredby this or any other clause in this contract.
(f) Adjusting billing prices. (1) Pending execution ofthe contract modification (see paragraph (e) above), the Contractorshall submit invoices or vouchers in accordance with billing pricesas provided in this paragraph. The billing prices shall be thetarget prices shown in this contract.
(2) If at any time it appears from information provided by thecontractor under subparagraph (g)(2) below that the then-currentbilling prices will be substantially greater than the estimatedfinal prices, the parties shall negotiate a reduction in thebilling prices. Similarly, the parties may negotiate an increase inbilling prices by any or all of the difference between the targetprices and the ceiling price, upon the Contractor's submission offactual data showing that final cost under this contract will besubstantially greater than the target cost.
(3) Any billing price adjustment shall be reflected in acontract modification and shall not affect the determination of thetotal final price under paragraph (d) above. After the contractmodification establishing the total final price is executed, thetotal amount paid or to be paid on all invoices or vouchers shallbe adjusted to reflect the total final price, and any resultingadditional payments, refunds, or credits shall be madepromptly.
(g) Quarterly limitation on payments statement. Thisparagraph (g) shall apply until final price revision under thiscontract has been completed.
(1) Within 45 days after the end of each quarter of theContractor's fiscal year in which a delivery is first made (orservices are first performed) and accepted by the Government underthis contract, and for each quarter thereafter, the Contractorshall submit to the contract administration office (with a copy tothe contracting office and the cognizant contract auditor) astatement, cumulative from the beginning of the contract, showing-
(i) The total contract price of all supplies delivered (orservices performed) and accepted by the Government and for whichfinal prices have been established;
(ii) The total costs (estimated to the extent necessary)reasonably incurred for, and properly allocable solely to, thesupplies delivered (or services performed) and accepted by theGovernment and for which final prices have not beenestablished;
(iii) The portion of the total target profit (used inestablishing the initial contract price or agreed to for thepurpose of this paragraph (g)) that is in direct proportion to thesupplies delivered (or services performed) and accepted by theGovernment and for which final prices have not been established -increased or decreased in accordance with subparagraph (d)(2)above, when the amount stated under subdivision (ii), immediatelyabove, differs from the aggregate target costs of the supplies orservices; and
(iv) The total amount of all invoices or vouchers for suppliesdelivered (or services performed) and accepted by the Government(including amounts applied or to be applied to liquidate progresspayments).
(2) Notwithstanding any provision of this contract authorizinggreater payments, if on any quarterly statement the amount undersubdivision (1)(iv) above exceeds the sum due the Contractor, ascomputed in accordance with subdivisions (1)(i), (ii), and (iii)above, the Contractor shall immediately refund or credit to theGovernment the amount of this excess. The Contractor may, whenappropriate, reduce this refund or credit by the amount of anyapplicable tax credits due the Contractor under 26 U.S.C. 1481 andby the amount of previous refunds or credits effected under thisclause. If any portion of the excess has been applied to theliquidation of progress payments, then that portion may, instead ofbeing refunded, be added to the unliquidated progress paymentaccount consistent with the Progress Payments clause. TheContractor shall provide complete details to support any claimedreductions in refunds.
(3) If the Contractor fails to submit the quarterly statementwithin 45 days after the end of each quarter and it is laterdetermined that the Government has overpaid the Contractor, theContractor shall repay the excess to the Government immediately.Unless repaid within 30 days after the end of the statementsubmittal period, the amount of the excess shall bear interest,computed from the date the quarterly statement was due to the dateof repayment, at the rate established in accordance with theInterest clause.
(h) Subcontracts. No subcontract placed under thiscontract may provide for payment on acost-plus-a-percentage-of-cost basis.
(i) Disagreements. If the Contractor and the ContractingOfficer fail to agree upon the total final price within 60 days (orwithin such other period as the Contracting Officer may specify)after the date on which the data required by paragraph (c) aboveare to be submitted, the Contracting Officer shall promptly issue adecision in accordance with the Disputes clause.
(j) Termination. If this contract is terminated beforethe total final price is established, prices of supplies orservices subject to price revision shall be established inaccordance with this clause for (1) completed supplies and servicesaccepted by the Government and (2) those supplies and services notterminated under a partial termination. All other elements of thetermination shall be resolved in accordance with other applicableclauses of this contract.
(k) Equitable adjustment under other clauses. If anequitable adjustment in the contract price is made under any otherclause of this contract before the total final price isestablished, the adjustment shall be made in the total target costand may be made in the maximum dollar limit on the total finalprice, the total target profit, or both. If the adjustment is madeafter the total final price is established, only the total finalprice shall be adjusted.
(l) Exclusion from target price and total final price. Ifany clause of this contract provides that the contract price doesnot or will not include an amount for a specific purpose, thenneither any target price nor the total final price includes or willinclude any amount for that purpose.
(m) Separate reimbursem*nt. If any clause of thiscontract expressly provides that the cost of performance of anobligation shall be at Government expense, that expense shall notbe included in any target price or in the total final price, butshall be reimbursed separately.
(n) Taxes. As used in the Federal, State, and Local Taxesclause or in any other clause that provides for certain taxes orduties to be included in, or excluded from, the contract price, theterm contract price includes the total target price or, ifit has been established, the total final price. When any of theseclauses requires that the contract price be increased or decreasedas a result of changes in the obligation of the Contractor to payor bear the burden of certain taxes or duties, the increase ordecrease shall be made in the total target price or, if it has beenestablished, in the total final price, so that it will not affectthe Contractor's profit or loss on this contract.
(End of clause)
Alternate I (APR 1984). As prescribed in 16.406(a), addthe following paragraph (o) to the basic clause:
(o) Provisioning and options. Parts, other supplies, orservices that are to be furnished under this contract on the basisof a provisioning document or Government option shall be subject toprice revision in accordance with this clause. Any pricesestablished for these parts, other supplies, or services under aprovisioning document or Government option shall be treated astarget prices. Target cost and profit covering these parts, othersupplies, or services may be established separately, in theaggregate, or in any combination, as the parties may agree.
[48 FR 42478, Sept. 19, 1983, as amended at 61 FR 67426, Dec. 20,1996; 62 FR 12696, Mar. 17, 1997; 62 FR 51265, Sept. 30, 1997]
