Posted: May 4th, 2016
January 5, 2000. Conrad submitted a request for equitable adjustment
Proposed Equitable Adjustment
Material 95,000 yards@ $10/yard $950,000
Material Overhead 5% of material Cost $ 47,500
Other Direct Cost Estimation of cost impact of $ 500
the change ________
Total Manufacturing $998,000
Cost
G&A Expense 10% of Total Mfg Cost $ 99,800
_________
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
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