I still need more help on contract types. When I was a 2Lt I understood this perfectly, but I'm a bit slower now. One type that has me stumped on its application is a fixed-price incentive successive targets contract. How are contracts negotiated/administered using this? Can benefits (cost restraints) of competition be preserved in the later phases? Is there an intermediate text available on this and similar topics? It seems that the resources in DAD just repeat the FAR in shorter sentences, while other sources seem to push one contract type as the best for most applications.
Glen

By Anonymous on Friday, September 29, 2000 - 11:43 am:

Only source I'm aware of is the 1969 Dod/NASA Contract Incentive Guide.

By bob antonio on Friday, September 29, 2000 - 11:43 am:

Glen:

When you say DAD are you including volume 4 of the current Pricing Guide?

I am going to see if I can find something better.

By Vern Edwards on Friday, September 29, 2000 - 11:58 am:

There has never been much guidance about the use of fixed-price incentive (successive targets) FPI(S) contracts. The 1986 edition of the Armed Services Pricing Manual, Vol. 1, said:

"This arrangement is not used very often. It can be useful in buying the first or second production quantity of a newly developed item. In acquiring a new system, long leadtime requirements may make in necessary to contract for a follow-on quantity before design or production stability has been achieved. Lacking this stability, and considering the remaining uncertainties, cost or pricing data available at the time of follow-on award may not be adequate for negotiation of an FPIF arrangement.

However, you expect that the uncertainties will be resolved relatively early in performance of the follow-on contract and, as a consequence, that cost or pricing data adequate for establishing a firm target arrangement will be available. In such a case you may use an FPIS arrangement rather than awarding a letter contract or negotiating a cost-reimbursement arrangement. The FPIS establishes an overall price ceiling and gives the contractor some degree of cost responsibility in the interval before a firm arrangement can be negotiated.

When an FPIS contract is used, a firm pricing arrangement before the first item on the contract is delivered. The new arrangement may be either FFP or FPIF."

The ASPM then provide a few more paragraphs worth of advice. This guidance is virtually the same as that provided in the 1975 version of the pricing manual. The current Contract Pricing Reference Guide, Vol. IV, Advanced Issues in Contract Pricing, discusses cost incentives in Chapter 1, and discusses the FPI(F) and CPIF arrangements extensively, but barely mentions the FPI(S) arrangement.

That's about it. It may be that some agency or office has issued more extensive guidance at one time or another, but I'm not aware of any.

By Vern Edwards on Friday, September 29, 2000 - 12:03 pm:

The 1969 DOD/NASA Incentive Contracting Guide contained only the guidance from the 1969 edition of ASPM No. 1, which it did not supplement. The guidance in the 1969 edition of ASPM No. 1 was virtually identical to that in the 1986 edition of ASPM, Vol. 1.

By bob antonio on Friday, September 29, 2000 - 12:16 pm:

Glen:

One document that goes beyond government documents is a "Monograph" written by Ralph Nash. It is simply called "Incentive Contracting." I tried to locate it in publication but it does not appear. I haven't had a chance to check it out for successive targets. However, it is 112 pages in its 1963 edition.

The correct title and information is "Government Contracts Monograph No. 7; Incentive Contracting by Ralph C. Nash, Government Contracts Program, The George Washington University, 1963." I checked GWU's publications and did not see a current monograph in print. However, when talking about FPIS, I think few have ever dealt with them. They are old and so is the monograph.

By Vern Edwards on Friday, September 29, 2000 - 01:09 pm:

The Nash Incentive Contracting monograph is no longer in print. It was published in 1963 as part of The George Washington University Government Contracts Program monograph series. It was No. 7 in the series. I have a copy. It makes no mention at all of the FPI(S) contract.

The bottom line, folks, is that there isn't much guidance about the application and management of FPI(S) contracts because they aren't used much, if at all. They aren't used much because they were a pain in the neck.

By bob antonio on Friday, September 29, 2000 - 02:21 pm:

Vern:

Where do you think our contracting friends are this final work day of the fiscal year?

By Vern Edwards on Friday, September 29, 2000 - 02:54 pm:

Off somewhere, writing their names in ink, as quickly and as often as possible from now until midnight tomorrow. God bless them!

By Anonymous on Friday, September 29, 2000 - 03:47 pm:

Glen,

Try e-mailing Maj Ed Keller. When he was at SMC he used this contract type extensively and should be able to help you out.

His e-mail address is donald.keller@langley.af.mil

By Kennedy How on Monday, October 02, 2000 - 01:20 pm:

I would think some people would still be negotiating on Sep 31.

Seriously, most of the support items contracts are supposed to be completed by 28 Sep. The systems stuff will probably go on through COB 29th, as usual.

Things are a lot less frantic these days, at least for us. Not as many 9:00pm signatures.....

Kennedy