Quantcast Supplies or Services and Prices/Costs -Cont.

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a. A single line item, supported by as schedule of deductions, or
b.  as a single line item, supported by subline items instead of a
schedule of deductions, or
as a single line item, supported by a limited number of sublines and
by a schedule of deductions which breaks down the subline items.  An example
of a contract with two subline items is shown in Figure 3-7.
In the case of firm fixed price/indefinite quantity contracts, careful
consideration should be given to the contract requirements which should be
included in the firm fixed price (lump sum) part, and those which should be
in the indefinite quantity part.
The contract requirements shown in the EPRS are reviewed one by one and a
decision is made as to which should be included in the firm fixed price part
of the contract.  Contract requirements which are readily quantifiable or
fixed in scope are included in the firm fixed price. Therefore, if the
number of occurrences of a particular contract requirement over a fixed
period of time can be established in advance, the contract requirementwill
generally be included in the firm fixed price.  Generally, if the service is
scheduled as opposed to unscheduled, it will be included in the firm fixed
price.
If the work required was carried out under a prior contract, a determination
should be made as to whether the contract requirement was included in the
firm fixed price or indefinite quantity part of the contract. The effect of
including the work in the firm fixed price part or in the indefinite
quantity part depends on the ease of contract administration, or any
difficulties which were encountered should be examined. The fact that the
work was included in a particular part in a prior contract should not alone
determine where the work will be included in the new contract.
Whether or not a particular contract requirement calls for unscheduled
services, or a contract requirement that is not readily quantifiable should
be included in the firm fixed price, is often unclear and a decision has to
be made weighing a number of factors.  These factors include what proportion
of the total contract price the contract requirement under consideration
represents: the reliability, of the historical record; the accuracy of an
estimated quantity; and the amount of variation in the occurrence of this
particular contract requirement in the past.  If the quantity cannot be
forecast with any degree of reliability and a significant dollar value is
involved, the contract requirement should, in most cases, be included in the
indefinite quantity part of the contract.
There is a temptation to include items which are not readily quantifiable in
the firm fixed price part of the contract. This expedient puts a major
burden of risk on the contractor and makes it difficult for the contractor
to bid a realistic price. Furthermore, a contract requirement, which is
erroneously included in the firm fixed price part of the contract, often
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