By Quentin W. Fleming
Covers the topic of growth funds in line with expenses incurred, as required via the Federal Acquisition legislation, a ways sub-part 32.5. The booklet recommends keeping a linkage among all development funds and the supplier's actual functionality for you to reduce hazards.
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Extra resources for A Probus Guide to Subcontract Project Management and Control: Progress Payments
Allocation of Subcontract Costs to the Appropriate Prime Contract(s) The buyer must take steps to assure that whatever is being purchased is done so with a proper allocation of costs against the appropriate prime contract. or frequently, prime contracts. The issue is an fundamental one: Who (which prime contract) will pay the bill for the purchased parts or services, and to which production lot or lots will the resulting hardware costs be allocated? Quite often, in the life cycle of a long-term program or production run, there will be concurrent (and active) multi-year buys for the same deliverable end-items.
At any given point in time there may be a half a dozen active prime contracts for the same program's hardware items, or spares, or buys for company inventory. The buyer must take steps to assure that there is a 22 Chapter 2 proper segregation of costs to the appropriate prime contract(s) for the items being bought. The segregation of costs to the appropriate prime contract may be done by the structuring of separate contract line items in a subcontract. Frequently, a buyer will Find that one prime contract allows for progress payments while another for the vary same hardware or services may not have progress payment provisions.
A forecast of their expenditures at the cost level. 3. A Gantt Chart with weighted values for each task, the sum of which will add up to 100 percent of the subcontract value, plus a commitment to update this schedule to support the processing of each request for progress payments. With these three supplier forecasts, the prime contractor will have the ability to monitor the supplier's performance during the life of the subcontract period. Please keep in mind that there are differing approaches used by the various prime contractors to minimize their exposure to the risks associated with the use of progress payments.