[Code of Federal Regulations]
[Title 41, Volume 4]
[Revised as of July 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 41CFR302-12.109]

[Page 195-196]
 
           TITLE 41--PUBLIC CONTRACTS AND PROPERTY MANAGEMENT
 
                   CHAPTER 302--RELOCATION ALLOWANCES
 
PART 302-12--USE OF A RELOCATION SERVICES COMPANY--Table of Contents
 
        Subpart B--Agency's Use of a Relocation Services Company
 
Sec. 302-12.109  What must we consider in deciding whether to use the fixed-fee or cost-reimbursable contracting method?

    You must consider the following factors in deciding whether to use 
the fixed-fee or cost-reimbursable contracting method:
    (a) Risk of alternative methods. Under a fixed fee contract, the 
relocation services company bears all risks not expressly contained in 
the contract. Under a cost-reimbursable contract, you must assume some 
or all risks and, therefore, must assume some management 
responsibilities under the contract as well. For example, under a fixed 
fee homesale program you are not directly liable for losses incurred if 
a residence does not sell immediately,

[[Page 196]]

while under a cost-reimbursable homesale program you assume some or all 
risks of selling the residence.
    (b) Cost of alternative methods. Under the fixed fee method of 
contracting, the fee includes a cost component for risks assumed by the 
relocation services company. Under the cost-reimbursable method of 
contracting, you are directly responsible for some or all of the costs 
associated with management of the contract. In deciding whether to use 
cost-reimbursable contracting you, therefore, must consider the cost of 
resources you would require (including personnel costs) to manage a 
cost-reimbursable relocation services contract.
    (c) Effect on the obligation of funds. You must obligate funds for a 
relocation in the fiscal year in which the purchase order is awarded 
under the contract. Under the fixed fee contracting method, the amount 
of the relocation services fee is fixed and you have a basis for 
determining the amount of funds to obligate. Under the cost-reimbursable 
contracting method, you must obligate funds based on an estimate of the 
costs that will be incurred. When opting for cost-reimbursable 
contracting you, therefore, should establish a reliable method of 
computing fund obligation estimates.