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Covers the topic of development funds in accordance with expenses incurred, as required through the Federal Acquisition rules, a long way sub-part 32.5. The ebook recommends holding a linkage among all development funds and the supplier's actual functionality with a purpose to reduce dangers.
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Additional info for A Probus Guide to Subcontract Project Management and Control: Progress Payments
The solicitation should include language along these lines: As a precondition to the award of progress payments on any resulting award, all respondents will submit two (2) financial projections profiles to describe their cost plans as follows: 1 . A Termination Liability Profile: A projection of the supplier's planned open commitments, all obligations and expenditures against this order, together with the estimated earned profit as of a point in time. (Note: this requirement is identical to the termination liability curve the prime contractor provides to the government to support their prime contract).
The responsible buyer has a vital role to play in such status reviews anytime their subcontract is discussed. At other times there will be visits to the supplier's facility from various functional organizations. Such visits should be coordinated through the buyer by the respective function feeling the need to visit the supplier. In no case should such visits be made without the knowledge of the buyer. Feedback (trip reports) should also be provided to the responsible buyer as soon as possible. True teamwork requires full multilateral communications to be effective.
Column (B) Cumulative Unit Deliveries: Reflects the contractual delivery schedule for the twelve engines. This schedule will be incorporated into the subcontract document itself. Column (C) Termination Liability Profile: Reflects the Termination Liability forecast as provided by the supplier (profile 1, above). It would be wise to incorporate this profile into the subcontract document in order to set the upper limits of our liability to the supplier at any point in time. ) Figure 2-2. A Financial Spreadsheet of Progress Payment Data HYPOTHETICAL ENGINES, INC.