Far Cost Sharing Contracts

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  • Topic: Contract, Sale of Goods Act 1979, Contract clauses
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  • Published : October 11, 2012
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Federal Acquisition Regulations (FAR) – Cost Sharing Contract

-type of cost-reimbursement contract

-government pays a pre-negotiated percentage (60/40, 50/50) of the allowable costs to the contractor -commercial items not allowable
-no fee

16.303 Cost-Sharing Contracts

(a) Description. A cost-sharing contract is a cost-reimbursement contract in which the contractor receives no fee and is reimbursed only for an agreed-upon portion of its allowable costs. (b) Application. A cost-sharing contract may be used when the contractor agrees to absorb a portion of the costs, in the expectation of substantial compensating benefits. (c) Limitations. See 16.301-3.

(a) A cost-reimbursement contract may be used only when --
(1) The factors in 16.104 have been considered;
(2) A written acquisition plan has been approved and signed at least one level above the contracting officer; (3) The contractor’s accounting system is adequate for determining costs applicable to the contract; and (4) Adequate Government resources are available to award and manage a contract other than firm-fixed-priced (see 7.104(e)) including— (i) Designation of at least one contracting officer’s representative (COR) qualified in accordance with 1.602-2 has been made prior to award of the contract or order; and (ii) Appropriate Government surveillance during performance to provide reasonable assurance that efficient methods and effective cost controls are used; (b) The use of cost-reimbursement contracts is prohibited for the acquisition of commercial items (see Parts 2 and 12).

16.307 Contract Clauses
As prescribed in 16.307(f), insert the following clause in solicitations and contracts when a cost-sharing contract is contemplated. This clause may be modified by substituting “$10,000” in lieu of “$100,000” as the maximum reserve in paragraph (b) if the contract is with a nonprofit organization. 52.216-12, Cost Sharing Contract – No Fee (Apr 1984)

(a) The Government shall not...
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