Content
Pricing - Ascertained Costs DEFCON 653
This page is an extract from the full topic guidance on Pricing – Ascertained Costs DEFCON 653 [70KB PDF]. It details any Constraints associated with Pricing on Ascertained Costs, provides a summary of the Authoritative Guidance and lists any essential reading, further reading or associated documents.
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None.
Where it is not possible to agree a fixed price or other incentive
pricing arrangement, either at the outset or during the course of the contract, the
contract may be placed on the basis that the contractor will be paid the costs reasonably
and properly incurred by him in carrying out the work plus a sum for profit - 'cost-plus'.
Such arrangements should only be used exceptionally and where project progress/performance
supported by Earned Value Management data.
Contracts priced on the basis of ascertained costs should normally
include
Acquisition teams must exercise careful judgement on the size of
terminal retentions pending final settlement, not only as a safeguard against over-payment
on `interims' but also as an incentive for finalisation.
Acquisition teams should monitor the contractor's activities
closely and consider reducing appropriately the level of progress and final payments to
the contractor, where necessary to rectify unsatisfactory performance (using
Earned Value Management (EVM) data as
evidence), unreasonable expenditure or failure to submit Cost Certificate and
Summary Cost Statements when required.
Certified cost statements are to be referred to the Cost Assurance and Analysis Service (CAAS) (formerly known as Cost Assurance Service (CAS)) within two weeks of receipt for selective investigation.
Final prices may be agreed including estimated costs, direct
and/or indirect, where these relate to a small proportion of the overall contract price
with appropriate `rounding' of the costs if necessary, unless there are special reasons
why this should not be done.
Essential Reading
General Notes to Defence Contractors (GNDC) No 1 - Costed Contracts - Contractors' Certified Cost Statements [41KB DOC]
DEFCON Guide No 1 - The Planning And Cost Management Of Major Development Contracts [240KB DOC]
DEFCON Guide No 2 - Planning And Monitoring Of Minor Development Contracts Reface [34KB PDF]
Pricing - Team Approach topic
Pricing - Subcontracts topic
Payment - Interim topic
