A cost plus a percentage of cost is not permitted but a cost plus FIXED
FEE negotiated on the basis of a percentage of PROPOSED COSTS is an
acceptable or standard meathod of establishing the FIXED FEE.  The
prohibition related to the fee being determined on the basis of INCURRED
costs in which case the FEE is not FIXED.

Norm Meeks
GLCC

On Wed, 2 Aug 1995, Lesley Cephas wrote:

> Charlie:  Hope you're not too incredibly busy. . .I have another one of
> those "but that's the way we've always done it" issues (remember, I just got
> here).  I was hoping you could shed some light.
>
> I remember reading (during my university days) that "cost plus a percentage
> of cost" procurements were not allowable costs.  Now I'm faced with a
> procurement where the vendor is proposing a budget that shows total costs
> (including IDC), a fee equal to 8% of total costs, and a GRAND TOTAL COST of
> the project.
>
> Does any of this sound familiar?
>
> Lesley