FAR Clause 52.216-17 - FPIS (Proposed Clean Edits).pdf

52.216-17 Incentive Price Revision-Successive Targets.

As prescribed in XX.XXX, insert the following clause:

INCENTIVE PRICE REVISION-SUCCESSIVE TARGETS – CONSTRUCTION (XXX XXXX)

(a) General. The supplies or services identified in the Schedule as Optional Bid Items _________ [Contracting Officer insert 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 ($__________________). The prices of these items shown in the Schedule are the initial target prices, which include an initial target profit of ___________ [Contracting Officer insert percent] percent of the initial target cost.

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

(c) Submitting data for establishing the firm fixed price. Within ___________ [Contracting Officer insert number of days] days after the end of the month in which the Government has completed the 95% backcheck construction documents, the Contractor shall submit the following data:

(i) A proposed firm fixed price for construction services to be performed, which must be less than the established the contract ceiling price.

(ii) An estimate of all construction costs to be delivered and performed under this contract, in the format of Table 15-2, FAR 15.408 (or in any other form on which the parties may agree), with sufficient supporting data to disclose unit costs and cost trends for-

(A) Support the accuracy and reliability of the estimate; and

(B) An explanation of the differences between this estimate and the original estimate used to establish the initial target price.

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

(iv) The Contractor’s affirmation that:

(A) The Contractor is satisfied that the project as described in the specifications and construction drawings is constructable using commercially practicable means and methods;

and

(B) The Contractor is satisfied that the construction work has been sufficiently described to enable it to estimate the cost of the work with reasonable accuracy; and

(C) The Contractor has disclosed to the Contracting Officer all of their actual knowledge relating to design errors and omissions that may affect the cost of their work; and

(D) The Contractor acknowledges that the final firm fixed price and time established for completion shall not be adjusted on account of cost or time attributable to known design errors and omissions disclosed by the Contractor pursuant to paragraph (c)(iv)(C) of this clause. Unknown design errors and omissions that form the basis for a change order may still be settled in accordance with FAR 552.243-4, Changes.

(d) Establishing firm fixed price for the Option. Upon the Contracting Officer’s receipt of the data required by paragraph (c) of this section, which will be less than or equal to the ceiling price, the Contracting Officer and the Contractor shall promptly establish either a firm fixed price for the Option, as follows:

(1) The parties shall negotiate a total firm fixed price for the option, based upon the data submitted under paragraph (c) of this section. The negotiated firm fixed price shall be the total final price for purposes of this clause. In no circumstance may the firm fixed price exceed the ceiling price

(2) If the total firm target cost is more than the total initial target cost, the total initial target profit shall be decreased. If the total firm target cost is less than the total initial target cost, the total initial target profit shall be increased. The initial target profit shall be increased or decreased by _____ percent of the difference between the total initial target cost and the total firm target cost. The resulting amount shall be the total firm target profit; provided, that in no event shall the total firm target profit be less than ___________ percent or more than ___________ percent [Contracting Officer insert percents] of the total initial cost.

(3) Failure of the parties to agree to a firm fixed price shall not constitute a dispute under the Disputes clause. If agreement is not reached, the Contracting Officer will not exercise the optional bid item(s), and construction services may be subsequently competitively procured by the Government. The Contracting Officer will review the Contractor’s and any subcontractor’s involvement in the design phase for organizational conflicts of interests in accordance with FAR Part 9.5 and may be required to exclude the Contractor, or subcontractors, from further competition for the competitively bid work.

(e) Disagreements. If the Contractor and the Contracting Officer fail to agree upon a firm fixed price within 60 days (or within such other period as the Contracting Officer may specify) after the date on which the data required in paragraphs (c) of this section are to be submitted, the Contracting Officer shall promptly notify the contractor that the optional bid item will not be awarded and the construction described in the option will be competitively procured.

(f) Equitable adjustments 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.

(g) 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.

Notes:

(1) The degree of completion may be based on a percentage of contract performance or any other reasonable basis.

(2) The language may be changed to describe a negotiated adjustment pattern under which the extent of adjustment is not the same for all levels of cost variation.

(End of clause)