(b) CLIN STRUCTURE AND ADVANCE PROCUREMENT AND EOQ SCRS
(1) If the contemplated multi-year contract involves any advance procurement, then the advance procurement CLINs (or SubCLINs) must refer to a SCR that explains how they relate to the associated production end item CLINs.
Example Sample Advance Procurement SCR a. Items [identify AP CLINs and/or SubCLINs] require advance procurement of supplies and services needed to produce deliverable end items, as follows:
b. It is not contemplated that deliveries will be made under the advance procurement SubCLINs. When the Government funds the production SubCLIN to which the advance procurement SubCLIN relates, then all work performed, funds obligated, costs incurred, and payments are made under the related production SubCLIN. c. If the Government funds an advance procurement SubCLIN and then cancels the related production SubCLIN, the parties will negotiate the amount to be paid the Contractor for the advance procurement effort performed, which will be part of the cancellation charge determined and payable under clause FAR 52.217-2, "Cancellation Under Multi-year Contracts." |
(2) There is one more SCR you should consider including in Section H regarding segregation of costs associated with performance of advance procurement CLINs. EOQ effort by itself does not result in a whole acquisition/program end item. EOQ CLINs are a means of funding and starting work on an end item until full funding for that item is received. Since EOQ costs become part of the end item cost, it is important to keep the EOQ costs segregated to prevent potential double billing by the contractor. A sample clause to accomplish this would read as follows:
Example "The total amount of dollars set forth for EOQ CLINs 0001AA, 0001AB, 0001AC, 0003AA, 0003AB, and 0005 are (insert type of appropriation for each fixed price) amounts. The contractor will segregate all costs incurred in performance of these EOQ CLINs. The Contract's cost segregationwill be in sufficient detail so that all work performed, cost incurred, and payments made under each EOQ are clearly identified with that EOQ CLIN/SubCLIN. Upon full funding of the related production CLIN/SubCLIN, the contractor will (1) maintain the integrity of its data and records on each EOQ CLIN/SubCLIN and (2) treat the total work performed and costs incurred and payments made under the EOQ CLIN/SubCLIN as part of the related production CLIN/SubCLIN." |