Thanks so much for the info.  I was able to find the exact item in A-110,
but after I "proved" that I wasn't making it up, I was asked to justify this
regulation.  I sort of fumbled through my explanation--pointing out that a
fixed fee was OK but if the fee is defined as a percentage of cost, it's not
fixed.  Yet I wasn't able to say it as eloquently as Norm Meeks did below.
Thanks again!

Lesley Cephas, Subgrants Manager
Institute for Sustainable Communities
Montpelier, VT  05602
xxxxxx@together.net
(802) 229-2900

>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
>