52.216-17 — Incentive Price Revision—Successive Targets.

FAR 52.216-17 — Incentive Price Revision—Successive Targets.. This clause is part of the Federal Acquisition Regulation and may be included in government contracts as a solicitation provision or contract clause.

52.216-17 Incentive Price Revision—Successive Targets. As prescribed in 16.406(b), insert the following clause: Incentive Price Revision—Successive Targets (JAN 2022) (a) General. The supplies or services identified in the Schedule as Items ___ [ Contracting Officer insert line item numbers ] are subject to price revision in accordance with this clause; provided, that in no event shall the total final price of these items exceed the ceiling price of ___ dollars ($___). The prices of these items shown in the Schedule are the initial target prices, which include an initial target profit of ___ [ Contracting Officer insert percent ] percent of the initial target cost. Any supplies or services that are to be (1) ordered separately under, or otherwise added to, this contract and (2) subject to price revision in accordance with this clause shall be identified as such in a modification to this contract. (b) Definition. Costs, as used in this clause, means allowable costs in accordance with part 31 of the Federal Acquisition Regulation (FAR) in effect on the date of this contract. (c) Submitting data for establishing the firm fixed price or a final profit adjustment formula. (1) Within __ [ Contracting Officer insert number of days ] days after the end of the month in which the Contractor has completed ___ [ see Note 1 ], the Contractor shall submit the following data: (i) A proposed firm fixed price or total firm target price for supplies delivered and to be delivered and services performed and to be performed. (ii) A detailed statement of all costs incurred in the performance of this contract through the end of the month specified above, in the format of Table 15-2, FAR 15.408 (or in any other form on which the parties may agree), with sufficient supporting data to disclose unit costs and cost trends for— (A) Supplies delivered and services performed; and (B) Inventories of work in process and undelivered contract supplies on hand (estimated to the extent necessary). (iii

• The supplies or services identified in the Schedule as Items ___ [ Contracting Officer insert line item numbers ] are subject to price revision in accordance with this clause; provided, that in no event shall the total final price of these items exceed the ceiling price of ___ dollars ($___).
• Any supplies or services that are to be (1) ordered separately under, or otherwise added to, this contract and (2) subject to price revision in accordance with this clause shall be identified as such in a modification to this contract.
• (1) Within __ [ Contracting Officer insert number of days ] days after the end of the month in which the Contractor has completed ___ [ see Note 1 ], the Contractor shall submit the following data: (i) A proposed firm fixed price or total firm target price for supplies delivered and to be delivered and services performed and to be performed.
• (2) The Contractor shall also submit, to the extent that it becomes available before negotiations establishing the total firm price are concluded— (i) Supplemental statements of costs incurred after the end of the month specified in subparagraph (1) above for— (A) Supplies delivered and services performed; and (B) Inventories of work in process and undelivered contract supplies on hand (estimated to the extent necessary); and (ii) Any other relevant data that the Contracting Officer may reasonably require.
• (3) If the Contractor fails to submit the data required by subparagraphs (1) and (2) above within the time specified and it is later determined that the Government has overpaid the Contractor, the Contractor shall repay the excess to the Government immediately.
• Unless repaid within 30 days after the end of the data submittal period, the amount of the excess shall bear interest, computed from the date the data were due to the date of repayment, at the rate established in accordance with the Interest clause.
• Upon the Contracting Officer's receipt of the data required by paragraph (c) above the Contracting Officer and the Contractor shall promptly establish either a firm fixed price or a profit adjustment formula for determining final profit, as follows: (1) The parties shall negotiate a total firm target cost, based upon the data submitted under paragraph (c) above.
• (2) If the total firm target cost is more than the total initial target cost, the total initial target profit shall be decreased.
• If the total firm target cost is less than the total initial target cost, the total initial target profit shall be increased.
• The initial target profit shall be increased or decreased by __ percent [ see Note 2 ] of the difference between the total initial target cost and the total firm target cost.
• The resulting amount shall be the total firm target profit; provided, that in no event shall the total firm target profit be less than __ percent or more than __ percent [ Contracting Officer insert percents ] of the total initial target cost.
• (3) If the total firm target cost plus the total firm target profit represent a reasonable price for performing that part of the contract subject to price revision under this clause, the parties may agree on a firm fixed price, which shall be evidenced by a contract modification signed by the Contractor and the Contracting Officer.
• (4) Failure of the parties to agree to a firm fixed price shall not constitute a dispute under the Disputes clause.
• If agreement is not reached, or if establishment of a firm fixed price is inappropriate, the Contractor and the Contracting Officer shall establish a profit adjustment formula under which the total final price shall be established by applying to the total final negotiated cost an adjustment for profit or loss, determined as follows: (i) If the total final negotiated cost is equal to the total firm target cost, the adjustment is the total firm target profit.
• (iv) The total firm target cost, total firm target profit, and the profit adjustment formula for determining final profit shall be evidenced by a modification to this contract signed by the Contractor and the Contracting Officer.
• Unless a firm fixed price has been established in accordance with paragraph (d) of this section within __ [ Contracting Officer insert number of days ] days after the end of the month in which the Contractor has delivered the last unit of supplies and completed the services specified by item number in paragraph (a) of this section, the Contractor shall submit in the format of table 15-2, FAR 15.408 (or in any other form on which the parties agree)— (1) A detailed statement of all costs incurred up to the end of that month in performing all work under the items; (2) An estimate of costs of further performance, if any, that may be necessary to complete performance of all work under the items; (3) A list of all residual inventory and an estimate of its value; and (4) Any other relevant data that the Contracting Officer may reasonably require.
• Unless a firm fixed price has been agreed to in accordance with paragraph (d) above, the Contractor and the Contracting Officer shall, promptly after submission of the data required by paragraph (e) above, establish the total final price, as follows: (1) On the basis of the information required by paragraph (e) above, together with any other pertinent information, the parties shall negotiate the total final cost incurred or to be incurred for the supplies delivered (or services performed) and accepted by the Government and which are subject to price revision under this clause.
• (2) The total final price shall be established by applying to the total final negotiated cost an adjustment for final profit or loss determined as agreed upon under subparagraph (d)(4) above.
• The total final price of the items specified in paragraph (a) above shall be evidenced by a modification to this contract, signed by the Contractor and the Contracting Officer.
• This price shall not be subject to revision, notwithstanding any changes in the cost of performing the contract, except to the extent that— (1) The parties may agree in writing, before the determination of total final price, to exclude specific elements of cost from this price and to a procedure for subsequent disposition of these elements; and (2) Adjustments or credits are explicitly permitted or required by this or any other clause in this contract.