A. You are the PM on a cost plus award fee contract. The original contract value
ID: 2752580 • Letter: A
Question
A. You are the PM on a cost plus award fee contract.
The original contract value is $545M - with a 2% fixed fee and 7% maximum award fee.
Original Contract
Cost
$ 500,000,000
Fixed Fee 2%
$ 10,000,000
Award Fee Pool 7%
$ 35,000,000
Total Price
$ 545,000,000
The contract has just completed and you know the following:
You overran the original contract cost by 10%.
You were awarded an award fee score of 75 - which entitles you to 75% of the award fee pool.
Contract modifications above the original contract value have been authorized.
What is the final price you are entitled to?
B. You are the PM on a Time and Materials contract that just completed
You know the following:
Labor category
Actual Hours
Bill Rate Per Hour
Fully Burdened (Loaded) Cost Rate Per Hour
Program Manager
825
$ 250
$ 275
System Engineer
1545
$ 200
$ 190
Technical Spec 1
850
$ 175
$ 165
Technical Spec 2
895
$ 150
$ 125
Technical Spec 3
550
$ 125
$ 100
Admin
350
$ 80
$ 78
There are no non-labor costs
What profit/loss did you earn on each category?
What profit/loss did you make on the total contract?
A. You are the PM on a cost plus award fee contract.
The original contract value is $545M - with a 2% fixed fee and 7% maximum award fee.
Original Contract
Cost
$ 500,000,000
Fixed Fee 2%
$ 10,000,000
Award Fee Pool 7%
$ 35,000,000
Total Price
$ 545,000,000
The contract has just completed and you know the following:
You overran the original contract cost by 10%.
You were awarded an award fee score of 75 - which entitles you to 75% of the award fee pool.
Contract modifications above the original contract value have been authorized.
What is the final price you are entitled to?
B. You are the PM on a Time and Materials contract that just completed
You know the following:
Labor category
Actual Hours
Bill Rate Per Hour
Fully Burdened (Loaded) Cost Rate Per Hour
Program Manager
825
$ 250
$ 275
System Engineer
1545
$ 200
$ 190
Technical Spec 1
850
$ 175
$ 165
Technical Spec 2
895
$ 150
$ 125
Technical Spec 3
550
$ 125
$ 100
Admin
350
$ 80
$ 78
There are no non-labor costs
What profit/loss did you earn on each category?
What profit/loss did you make on the total contract?
Explanation / Answer
Labor category
A Details Amt $ Original cost 500,000,000 Cost overrun 10%= 50,000,000 Total Cost 550,000,000 Fixed fee 10,000,000 Award fee @75% of pool 26,250,000 Final Price of the contract 586,250,000 BLabor category
Actual Hours( a.) Bill Rate Per Hour(b) Fully Burdened (Loaded) Cost Rate Per Hour© Profit /(Loss) =a*(b-c) Program Manager 825 250 $ 275 275 (20,625) System Engineer 1,545 200 $ 190 190 15,450 Technical Spec 1 850 175 $ 165 165 8,500 Technical Spec 2 895 150 $ 125 125 22,375 Technical Spec 3 550 125 $ 100 100 13,750 Admin 350 80 $ 78 78 700 Total Profit 40,150Related Questions
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