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B-204499 1 (1981-11-09)

handle is hein.gao/gaobadjwf0001 and id is 1 raw text is: dIL-A(.C_ 61 UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON, D.C. 20548 OFFICE OF GENERAL COUNSEL November 9, 1981 B-204499 Mr. William J. Maraist Assistant Administrator for Regulations Office of Federal Procurement Policy Office of Management and Budget Executive Office of the President Dear Mr. Maraist: By letter dated August 20, 1381, you requested our comments on a draft segment of 44!F ederal Acquisition Regu-1ation covering Part 16 - Types of Contracts. We note that paragraph 16.301-4(b) provides that cost-plus-incentive-fee and cost-plus-award-fee contracts are subject to the fee limitations set forth in 10 U.S.C. S 2306(d) (1976) and 41 U.S.C. § 25-4(b)'(1976). We also note that the paragraph provides that the maximum fee limitations for cost-plus-incentive-fee and cost-plus- award-fee contracts may be waived by agency heads or their designees. Under 10 U.S.C. § 2306(d) and 41 U.S.C. § 254(b) fees under cost-plus-fixed-fee contracts are limited to a maximum of up to 15 percent of estimated costs depending on the work required. Currently, both the Defense Acqui- sition Regulation (DAR) and the Federal Procurement Regu- lations (FPR) provide that cost-plus-incentive-fee and cost-plus-award-fee contracts are subject to these maximum fee limitations. The regulations do not, however, permit the maximum fee limitations to be waived by agency heads or their designees. No explanation is given why the FAR permits agency heads or their designees to waive the maximum fee limitations. Without an explanation regarding the need for permitting the waiver, we cannot determine whether this is an appropriate addition to the FAR.

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