Debra Underwood Inc. Case Study

1268 Words6 Pages
The Debra Underwood Inc. (DUI) is the small company which specializing in small coating products for ceramic tile and marble floors. DUI intends to supply coasting products and service outline in the Request for Proposal (RFP) #123456789, at a fair price and prompt convenient service. The local competitor has removed their name from contract consideration and requested to become a sub-contractor with DUI. This could benefit the company because the local competitor is experience in flooring and the products and has adequate staffing. Having a sub-contractor may help generate additional job services and increase productivity pertaining to the floor specialty products of the business. This paper will address some of the contract cost…show more content…
There are two options of payment types the company could consider; Progress payment and performance based payment. Progress payments are based on the cost incurred by the contractor as work progresses under a contract, which would not work for the company. Performance based payment are an alternative to progress. Performance based payment offer a opportunity for “win-win” financial arrangement with the government. “It is important to remember that the fundamental purpose of all contract financing is to assist the contractor in the paying the cost it incurs in the performance of the contract and, per FAR 32.1004(b)(2) (i), to do so “only to the extent actually needed for prompt and efficient performance” (Defense Procurement and Acquisition Policy). This type of financing is based on specific performance criteria and should include the Federal Acquisition Regulation Clause 252.232-32 in the contract for Performance Base Payments. These payments represent expenses that the company can reasonably be expected to incur in order to achieve completion of the contract. This could help with the existing overflow of floor equipment that the Navy base has. Performance base payments can be structured to provide significant cash-flow to the…show more content…
This closeout would mean the company has complied with all the contractual requirements and the government has fulfilled its obligations. The Contract Administration Office of the company will insure the completion of all administration actions. During the closeout the company must obtain statements relate to the certifying the contractual requirements were compete, provide evidence the data was delivered, provide statements from Product Assurance that all deliveries were made and accepted; also check with the legal department and finance department for claims or litigation action operative or pending, “FAR 4.804 sets specific time periods for closing contracts. Timely closeout delegates excess funds and returns remaining funds for possible use elsewhere. It also minimizes the costs associated with administration and closeout processes. “This benefits all parties and allows all affected activities to concentrate on current and future requirements” (Kanuer). The company auditor will perform an audit and use a checklist to aid in the closure process of the contract files. The checklist will be used to identify a need to expend beyond the period of performance and whether the cost incurred exceeds the amount of the contract funding, these items could require modifications. The list also will allow the contract administrator to act promptly
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