Posted: August 26th, 2016

What is the estimted cost?

Total Cost $1,097,800
Profit 15% of Total Cost $ 164,670
_________
Requested Adjustment $1,262,470
February 1, 2000. The Contracting Officer requested assistance from the ACO cognizant auditor and technical personnel.
February 28, 2000. Technical personnel found that:
? Conrad purchased a reasonable amount of material.
? The proposed Material Overhead was excessive for the effort involved, issuing and administering a single purchase order. Estimated actual cost was $250.
February 28, 2000. The cognizant auditor did not question any of the proposed cost. The auditor did comment that the proposed indirect rates complied with the current Forward Pricing Rate Agreement (FPRA)
March 5, 2000. The contracting officer developed a negotiation position based on the audit and technical reports.
Equitable Adjustment Negotiation Objective
Material Accepted Conrad proposed amount $ 950,000
Material Overhead Accepted Technical recommentation $ 250
Other Direct Cost Accepted Conrad Proposed amount $ 500
________
Total Mfg Cost $ 950,750
G&A Expense Accepted proposed 10% rate $ 95,075
Total Cost $1,045,825
_________
Profit 5% of Total Cost because costs all
incurred $ 52,291
_________
Adjustment objective $1,098,116