Hello All!
I found this exchange on fixed price contracts helpful, but was left with
one question. Can someone explain or spell out what a PPPF contract is?
Thanks much.
Jean
Research Administration Discussion List <xxxxxx@HRINET.ORG> writes:
>Greg makes very strong points that should be valued. His view of how the
>for-profit looks at things is quite accurate. I do wish to point out
>that my statement in my final paragraph was directed explicitly towards
>grants, as opposed to contracts. Greg, on the other hand, describes
>considerations that are more likely to come about in a contract
>situation. There can be considerable differences between the two from a
>university's point of view when looking at the way to sub- out the work;
>a subaward under A-110 rules may be quite different from a subcontract
>under FAR because the purposes and risks of the projects, as proposed,
>are frequently -- but not always -- different. The views Greg and I
>presented should both be studied!
>
>Chuck
>
>
>
>At 10:27 AM 10/1/2004, you wrote:
>
>
>Oh, my gosh! I'm going to disagree somewhat with Dr. Chermside on his
>closing point. Could this be professional suicide?
>
>It is possible that there are several potential for-profits that are
>under consideration to team with you. You do not necessarily know what
>the final outcome of your proposal will be. You could not really forsee
>the scope that will be finally agreed upon between you and the Agency,
>and by fiat to the sub, so you couldn't really project the type of award
>to be negotiated. The Agency really doesn't care what type of
>arrangement you have with your subs except to the extent that the
>required flow-through provisions are in the subaward no matter what the
>form.
>
>Now it is true that some branches of agencies look sideways at FPC's for
>some reason. They're really no different than a Purchase Order. You
>provide a good/service, I give you a fixed amount of money for that.
>They don't have problems with those, so they really shouldn't have any
>problems with a FPC.
>
>When should a project be a CRC, CPFF, PPPF, FPC, or any of the other
>miriad of types of contracts? The FAR is a good place to look. It's all
>about sharing risks.
>
>If I have no idea whether the objectives can be met or how much it will
>really cost, I would issue a CRC (university) or a CPFF (company). Think
>basic research. The project could be over as soon as it begins with min
>imalcosts. decades costing many billions. Here the risks lean most
>heavily on the prime. The sub will be paid for their costs.
>
>If I'm reasonably sure that the outcomes can be achieved with specific
>effort, but there are some significant risks involved, I'd lean towards a
>PPPF where my costs will be coverd and I'll still make my profit on a
>percentage basis of my costs. Here the risks are shared equally between
>prime and sub. The prime pays for what the sub expends, and the sub gets
>some or all of their fees.
>
>Finally, if you know the outcomes and the efforts involved and can put a
>price to it with assurance, a FPC is the way to go. This is like buying
>a painter's services. You can shop the job out, get costs to perform and
>sign a contract. If the painter can knock off your job in a day and you
>can accept the quality of work performed, they'll come out ahead. If it
>takes them a week, they get the same amount and earn little or lose
>money. As the owner, I don't care so long as the quality is there and
>the other terms of the agreement are met. Here, the risks are all on the
>sub.
>
>Greg
Jean M. Murphy
Director of Pre-Award Services
Wellesley Centers for Women
http://www.wcwonline.org
E-mail: xxxxxx@wellesley.edu Phone: 781-283-2508 Fax:
781-283-2504
Wellesley College, Cheever House, 106 Central Street, Wellesley, MA 02481
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