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Fu rt h ermo re the actual cost by mo n th on th e

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Furthermore, the actualcostbymonthonthe prior contracts shouldmakethefinancing needateach event easiertodetermine. Moreeffortwill berequiredfor initial production contracts to identifyeventsand establishcompletioncriteria andvalue events, butPBPscanstill be practicalfor themas well.CompetitiveSolicitations~The PBPEvaluation Checklist is in the Appendix of the 2014 PerformanceBased Payment Guide ......._Page 6of49I~BackNext
CON200BusinessDecisionsforContractingLesson7.2-Performance-BasedPaymentsandProgressPaymentsRESOURCESIPRINTIHELPWhen PBPs arePracticalViewCRSubmit CRI n determining whether or notPBPs are practicalfor use on a contract, thecontractingofficer should firstconsider whether the benefits associated with PBPsoutweigh the timeandeffortrequired to establish andadministerthem.Smaller contractsaregenerallynot goodPBPcandidates, as the administrativeeffortcaneasily exceed anyfinancial benefitsthatare realized. Thefollowing aresorreofthethingstoconsider indeciding whether PBPs are practicalfor aparticularacquisition situation.Selecteachtabforadditionalinformation. TheNextbuttonwillremain disableduntilyouselecteachtab.ProductionContractsServicecontractsDevelopmentIUndefinitizedContractContractsActions( UCAs)It is lesslikely that PBPs will be practical on fixed-price contractsfor ser1ices.Unlikeproduction contractsthatnormallyprovide opportunitiesfor numerousobj ective events such as receiptofmaterials andcompletion of subassembliesor stagesofmanufacturing, servicecontractsusually involvefewer and lessobj ective milestones.CompetitiveSolicitationsIIThe PBP Evaluation Checklist is in the Appendix of the2014Performance Based Payment Guide ......._Page 6of49I~BackNext
CON200BusinessDecisionsforContractingLesson7.2 -Performance-BasedPaymentsandProgressPaymentsRESOURCESIPRINTIHELPWhenPBPs arePracticalViewCRSubmit CRI n determining whether or notPBPs are practicalfor use on a contract, thecontracting officer should firstconsider whether the benefitsassociated with PBPs outweigh the time and effortrequiredtoestablish andadministerthem. Smaller contracts aregenerally notgood PBP candidates, as the administrative effortcaneasily exceed anyfinancial benefitsthatare realized. Thefollowing are someofthe things toconsider indeciding whetherPBPs are practicalfor a particularacquisition situation.Select eachtabforadditionalinformation.The Next buttonwillremaindisableduntilyouselecteach tab.ProductionContractsServiceContractsDevelopmentContractsUndefinitizedContractActions(UCAs)CompetitiveSolicitationsWhen afixed-price contract(fixed-price incentivefirm (FPIF) orfirm-fixed price(FFP))is consideredproperfor development,there can be a numberofsignificant eventsthat are PBP candidates. But, it isimportant to remember that aPBP event ormilestone should alwaysbe associated withthecompletion, notthe initiation, of the event ormilestone. In addition,thesignificance, timing, andrelationship of these eventsto cash flow needs arenot alwayseasytoassess. The linking of cashpayments to specific eventswillinherentlyfocusthecontractor's attention totheearliest completion ofthose events.

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Term
Spring
Professor
N/A
Tags
Contracting, General contractor

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