By Quentin W. Fleming
Covers the topic of growth funds in keeping with charges incurred, as required by means of the Federal Acquisition law, a ways sub-part 32.5. The booklet recommends retaining a linkage among all development funds and the supplier's actual functionality on the way to reduce hazards.
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Extra resources for A Probus Guide to Subcontract Project Management and Control: Progress Payments
The buyer should use the display in Figure 2-4 to "plot" selected data from the supplier's progress payment requests. Obtain the Supplier's 'LSchedulePlan" In concert with obtaining a cost projection plan from the subcontractor, a critical corollary step is to also obtain their schedule performance plan. This plan, in the form of a Gantt Chart, will demonstrate the supplier's understanding and commitment to physically completing the subcontract in the time frame promised. The supplier's definitive schedule plan must initially be provided to support their proposal and then updated each month after the subcontract award.
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.
Some background on flexible progress payments. In 1981, the Department of Defense adopted major changes in their policy toward assisting contractors by financing their work in process for the period prior to receiving payments for contract deliveries. In earlier years, it had been the DOD practice to allow contractors to submit and receive payments twice per month. Then, the DOD changed their policy to allow only one progress payment reimbursement each month-and that was certainly not good news to the private contractor sector.
A Probus Guide to Subcontract Project Management and Control: Progress Payments by Quentin W. Fleming