[Code of Federal Regulations]

[Title 41, Volume 4]

[Revised as of July 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 41CFR302-12.109]



[Page 196-197]

 

           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, 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



[[Page 197]]



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.