Posted: August 26th, 2016

Whose position on Material Overhead appears reasonable?

r Direct Cost Accepted Conrad Proposed amount $ 500
________
Total Mfg Cost $ 950,750
G&A Expense Accepted proposed 10% rate $ 95,075
Total Cost $1,045,825
_________
Profit 5% of Total Cost because costs all
incurred $ 52,291
_________
Adjustment objective $1,098,116
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)
1. Does the proposed material cost appear reasonable?
2. Whose position on Material Overhead appears reasonable?
3. Is the cost of preparing the request for equitable adjustment allowable?
4. Is the cost of preparing the claim allowable?
5. Is the proposed G & A expense reasonable?
6. How should the profit rate be determined?
7. If the contractor is to be paid interest, what should be the first day for interest calculation? Assume that the claim was submitted after Oct. 29, 1995)r Direct Cost Accepted Conrad Proposed amount $ 500
________
Total Mfg Cost $ 950,750
G&A Expense Accepted proposed 10% rate $ 95,075
Total Cost $1,045,825
_________
Profit 5% of Total Cost because costs all
incurred $ 52,291
_________
Adjustment objective $1,098,116
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)
1. Does the proposed material cost appear reasonable?
2. Whose position on Material Overhead appears reasonable?
3. Is the cost of preparing the request for equitable adjustment allowable?
4. Is the cost of preparing the claim allowable?
5. Is the proposed G & A expense reasonable?
6. How should the profit rate be determined?
7. If the contractor is to be paid interest, what should be the first day for interest calculation? Assume that the claim was submitted after Oct. 29, 1995)