FORM 74395

FORM 74395
2/09
INCENTIVE PRICE REVISION-FIRM TARGET (FPI)
(a) General. The scope of work identified in the order is subject to price revision in accordance with this article; provided, that in no event shall the total final price exceed the
ceiling price identified in the order. Any supplies or services that are to be (1) ordered
separately under, or otherwise added to, this order and (2) subject to price revision in
accordance with the terms of this article shall be identified as such in a modification to this
order.
(b) Definition of Cost. For the purpose of this article, "cost" or "costs" means allowable costs
in accordance with subpart 31.2 of the Federal Acquisition Regulations (FAR) as supplemented or modified by DEAR subpart 931.2 if DOE-funded, or DFARS part 231 if NAVYfunded, in effect on the date of this order.
(c)
Data Submission.
(1) Within 90 days after the end of the month in which the Seller has delivered the last unit
of supplies and completed the services specified in paragraph (a) above, the Seller
shall submit, for the purpose of determining the final order cost amount, a statement of
costs in any 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;
(ii)
An estimate of costs of further performance, if any, that may be necessary to
complete performance of all work;
(iii)
A list of all residual inventory and an estimate of its value; and
(iv)
Any other relevant data that Bettis may reasonably require.
(2) If the Seller fails to submit the data required by subparagraph (1) above within the time
specified and it is later determined that Bettis has overpaid the Seller, the Seller shall
repay the excess to Bettis immediately. Unless repaid within 30 days after the end of
the data submittal period, the amount of such excess shall bear interest at the rate
established in accordance with the Interest Article in FAR 52.232-17. Interest shall be
computed for the period from the date data was due to the date of repayment.
(d) Price Revision. Upon Bettis' receipt of the data required by paragraph (c) above and
subsequent to final audit results, Bettis and the Seller shall promptly establish the total final
price as specified in (a) above by applying to the final negotiated cost an adjustment for
profit or loss, as follows:
(1) On the basis of the information required by paragraph (c) above, 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 Bettis and
which are subject to price revision under this article.
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FORM 74395
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(2) The total final price shall be established by adjusting the total final negotiated cost by
an amount for profit or loss determined as follows:
When the total final
negotiated cost is:
The adjustment for profit or loss is:
i.
Equal to the total
target cost
Total target profit.
ii.
Greater than the
total target cost
Total target profit less __% of the amount by
which the total final negotiated cost exceeds the
total target cost. Costs in excess of the ceiling
price are not chargeable.
iii.
Less than the total
target cost but
greater than or equal
to $___________
Total target profit plus __% of the amount by
which the total final negotiated cost is less
than the total target cost.
iv.
Less than $__________
Total profit in (iii) above plus __% of the amount
by which the final negotiated cost is less than
$_______.
(e) Order Modification. The total final price of the work specified in paragraph (a) above shall
be evidenced by a modification to this order, signed by the Seller and Bettis. This price
shall not be subject to revision, notwithstanding any changes in the cost of performing the
order, except to the extent that-(1) The parties may agree in writing, before the determination of the 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 article in
this order.
(f)
Adjusting Billing Prices.
(1) Pending execution of the order modification (see paragraph (e) above), the Seller shall
submit invoices or vouchers in accordance with the requirements of the purchase order
and as provided in this paragraph (f).
(2) If at any time it appears from information provided by the Seller under subparagraph (g)(2) below 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
differences between the target prices and the ceiling price, upon the Seller's submission of factual data showing that final cost under this order will be substantially greater
than the target cost.
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(3) Any billing price adjustment shall be reflected in an order modification and shall not
affect the determination of the total final price under paragraph (d) above. After the
order 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 the final
price revision under this order has been completed.
(1) Within 45 days after the end of each quarter of the Seller's fiscal year in which a
delivery is first made (or services are first performed) and accepted by Bettis under this
order, and for each quarter thereafter, the Seller shall submit to Bettis (with a copy to
the Government auditor) a statement, cumulative from the beginning of the order,
showing-(i)
The total order price of all supplies delivered or services performed and accepted
by Bettis 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 Bettis and for which final prices have not been established;
(iii)
The portion of the total target profit (used in establishing the initial order 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 Bettis 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),
immediately above, differs from the aggregate target costs of the supplies or
services; and
(iv)
The total amount of invoices or vouchers for supplies delivered or services
performed and accepted by Bettis (including amounts applied or to be applied to
liquidate progress payments).
(2) Notwithstanding any provision of this order authorizing greater payments, if on any
quarterly statement the amount under subdivision (1)(iv) above exceeds the sum due
the Seller, as computed in accordance with subdivisions (1)(i), (ii), and (iii) above, the
Seller shall immediately refund or credit to Bettis the amount of this excess. The Seller
shall provide complete details to support any claimed reductions in refunds.
(3) If the Seller fails to submit the quarterly statement within 45 days after the end of each
quarter and it is later determined that Bettis has overpaid the Seller, the Seller shall
repay the excess to Bettis immediately. Unless repaid within 30 days after the end of
the statement submittal period, the amount of such excess shall bear interest at the
rate established in accordance with the Interest Article in FAR 52.232-17. Interest
shall be computed for the period from the date the quarterly statement was due to the
date of repayment.
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(h) Subcontracts. No subcontract placed under this order may provide for payment on a
cost-plus-a-percentage-of-cost basis. The Seller shall-(1) Insert in each price redetermination or incentive price revision subcontract the
substance of paragraph (g), above, and of this paragraph (h), modified to omit mention
of Bettis and to reflect the position of the Seller as the purchaser and of the
subcontractor as the vendor; and
(2) Include in each cost-reimbursement subcontract a requirement that each lower-tier
price redetermination or incentive price revision subcontract contain the substance of
paragraph (g) above and of this paragraph (h), modified as required by subparagraph (1) above.
(i)
Termination. If this order 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
article for (1) completed supplies and services accepted by Bettis 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 articles of this order.
(j)
Equitable Adjustment Under Other Articles. If an equitable adjustment in the order price is
made under any other article of this order before the total final price is established, the
adjustment shall be made to the total target cost and may be made in the maximum dollar
limit of the total final price, then 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.
(k)
Exclusion From Target Price and Total Final Price. If any article of this order provides that
the order 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.
(l)
Separate Reimbursement. If any article of this order expressly provides that the cost of
performance of an obligation shall be at Bettis expense, that expense shall not be included
in any target price or in the total final price, but shall be reimbursed separately.
(m) Taxes. As used in the Federal, State, and Local Taxes article or in any other article that
provides for certain taxes or duties to be included in, or excluded from, the order price, the
term "order price" includes the total target price or, if it has been established, the total final
price. When any of these articles requires that the order price be increased or decreased
as a result of changes in the obligation of the Seller 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 Seller's profit or loss on
this order.
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