The following clause, or as modified, may be used as prescribed in 17.9205:
REOPENER CLAUSE - PENDING INDIRECT RATES PROPOSAL (JAN l995) - DLAD
(a) At the time the price for this contract was established, agreement could not be reached on indirect expense rates due to [Note 1] . However, agreement was reached that [Note 2] of the contract price is subject to adjustment in accordance with the provisions of this clause.
(b) Within 30 days from [Note 3] , the Contractor shall submit an indirect cost rate proposal to the cognizant administrative contracting officer. Simultaneously, the Contractor shall submit a supplemental proposal to the procuring Contracting Officer for purposes of adjusting the contract price and option price, whether or not such option has been exercised. The supplemental proposal shall (1) use the methodology, direct costs, and profit indicated in paragraph (a), (2) be supported by cost or pricing data (FAR 15.401), and a Certificate of Current Cost or Pricing Data (FAR 15.406-2), and (3) include the effect of accounting system changes and contract modifications which may impact the amount of the adjustment. In no event will an upward adjustment result in a finalized contract price which exceeds $ .
(c) If determined necessary by the Contracting Officer, the Contractor agrees to commence negotiations concerning the amount of the adjustment within 30 days after receipt of the supplemental proposal by the Government.
(d) Should the Contractor fail to submit the information in paragraph (b), or should there be no agreement as to the amount of the price adjustment contemplated by this clause, then the Contracting Officer may make a unilateral determination and modify the contract accordingly. Failure to agree with such change in the contract price shall be resolved in accordance with the Disputes clause of this contract.
(e) The Contractor warrants that the contract price does not include any other allowance for the indirect rate contingency except as shown above.
(f) Should information after award indicate the amount developed in paragraph (a) may vary significantly from the finalized price, the contract price shall be adjusted downward or upward, subject to the ceiling in paragraph (b), through negotiation.
(End of Clause)
Note 1: Enter a description of why the reopener clause was included in the contract, such as:
(1) Delay in the Contractor's submission of its revised forward pricing rate proposal for fiscal year 200_;
(2) Delay in agreement on rates for this contract, which represents a substantial portion of the Contractor's business base for fiscal year 200_;
(3) Delay in completion of the mandatory IR&D/B&P advance agreement with the Contractor or agreement on the Contractor's corporate allocation for fiscal year 200_, and a determination of its impact on projected indirect expense rates; or,
(4) The absence of agreement on the impact on projected indirect expense results of a pending review of the Contractor's corporate allocation for fiscal year 200__.
Note 2: Enter the total dollar value subject to downward adjustment. This amount should be reached through discussion and agreement with the Contractor on how this amount was calculated. It is suggested a schedule of calculations as exemplified below be prepared, signed by both parties, and included as an attachment to the price negotiation memorandum. Absent such agreement, calculations supporting the Contracting Officer's interpretation of negotiations should be incorporated. Since such information may be considered confidential by the Contractor, the details should not be incorporated into a reopener clause or otherwise included in the contract:
FY 200_ FY 200_
Indirect Expense Rate Calculations:
Materials Overhead Pool (a) $ __________ $ __________
Materials Base (b) __________ __________
Materials Overhead % __________ __________
Labor Overhead Pool (c) __________ __________
Direct Labor Hours Base (d) __________ __________
Labor Overhead % __________ __________
Other Direct Costs (e) __________ __________
G & A Expenses Pool __________ __________
Total Cost Input Base (a+b+c+d+e) __________ __________
G&A Expenses % __________ __________
Contract Price Calculations (CLIN ):
FY 200_ FY 200_
Direct Materials $ __________ $ __________
Other Direct Costs __________ __________
Material Overhead ( % / %) __________ __________
Direct Labor Hours ( hrs / hrs) __________ __________
Direct Labor Costs __________ ___________
Labor Overhead ( % / % of D.L. Hrs) __________ __________
Subtotals $ __________ $ __________
G & A ( % / %) __________ __________
Subtotals $ __________ $ __________
Profit ( % / %) __________ __________
Cost of Money - Material ( % / %) __________ __________
Cost of Money - G & A ( % / %) __________ __________
Subtotals $ __________ $ __________
(each contractor FY)
Total Price $ _________________
Note 3: Insert an appropriate description of the date for determining when submission of the reopener proposal is required, such as (1) contract award or (2) establishment of the revised forward pricing rate agreement.
(End of Clause)
