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B-195732 1 (1982-09-23)

handle is hein.gao/gaobadkqb0001 and id is 1 raw text is: TH COMPTROLLER LINERAL DECIIIION , . OP HriE U NIU3O * TOTUU WASHI N GTO N 0. 0, '054 FILE: B-195732 DATE; September 239 19P? MATTER OF; Enviroiental Protection Agenc!--Request &r Clar'ficatio of B-195732, June 11, 1980, 59 WM-m. Gen. 518 DIGEST:. Discretionary cost increases in cost reimbursement ontracts which exceed contractually stipulated ceilings set forth in Limitation of Cost clauses and which are not enforceable by contractor are properly chargeable b funds available when the discretionary increase is granted by the con- tracting officer, 59 Unp. Gen. 516 (1950) and other prior inconsistent decisions are nodified accordingly. The Envirorinental ProtectJon Agency (EPA) requests clarification of our decision in the matter of Recording Obligations Under EPA Oast-Plus- Fixed-Fee-Contract, 59 Carp. Gen. 518 (1980). Tit decision concerned the proper appropriation to charge for a cost overrun of a cost-plus- fixed-fee-contract with the Institute of Gas Technology for technical consulting services. Briefly, that decision involved a cost overrun (i.e., an increase in the total cost of the contract beyond the contract's ceiling).result- ing from a revision in the negotiated overhead rates used to canpute in- direct costs. The basic contract w&s executed on January 17, 1975. The modtficaton which resulted in the cyst overrun was executed on Match 23, 1979. This modificatiun was negotiat.ad pursuanit to the procedures set forth in the Negotiated Overhead Rates clause of the basic contract which entitled the contractor to pric-e adjustments under certain condi- tions. Assuming all other conditions were met, this clause, operating in conjunction with the contract's Limitation of Cost provision, required price adjustmints for allowable indirect costs but only if thke final rate would not cause the contract to exceed any mnotary c.oiling, con- tzact cbligation, or specific cost allowance or disallaqance provided for in the contract. Clause 29, section (d). The contract, like most cost reimbursemant contracts, contained a Limitation of Cost clause which established an estimated cosl ceiling and provided tiat once that ceiling is reachWd, the contractor is under no obligation to continue perfornance unless additional funds are allocated to the contract. Similarly, the agency is under no obligation to raise the ceiling to fund additional costs. 4 • I

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