Posted: May 4th, 2016

What is theeconomic value of food?

– 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. (See attached file for data)

March 31, 2000. After weeks of negotiation, the contracting officer and the contractor could not reach agreement on an equitable adjustment. The major areas of difference were Material Overhead and Profit. As a result, the contractor submitted a claim seeking payment under the disputes clause of the contract. (See attached file for data)

The Conrad Corporation is a clothing manufacturer that won a sealed-bid contract to produce uniforms for the Government. Now several months later, Conrad has submitted a claim related to the Government’s failure to provide Government Furnished Material (GFM). The following paragraphs outline contract events related to the claim:

October 20, 1998. A contract was awarded for production for 101,400 uniform costs. The contract specifies that the Government will furnish the material required to produce the outer shell of the required coats. GFM consumption was estimated at 2.4 yards per coat for a total material usage of 243,360 yards. The contract called for the Government to release GFM in quantities no larger than 50,000 yards to limit contractor storage space requirements at the Conrad plant.

October 5, 1999. Government Depot personnel notified the contracting officer that the Depot was unable to fill Conrad GFM requisitions because of a stock shortage. Depot computer records indicated that there were 100,000 yards of material available but a physical inventory failed to locate any of the required material or an acceptable substitute.

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