52.232-20 Limitation of Cost.

As prescribed in 32.706-2(a), insert the following clause. The 60-day period may be varied from 30 to

90 days and the 75 percent from 75 to 85 percent. "Task Order" or other appropriate designation

may be substituted for "Schedule" wherever that word appears in the clause:

Limitation of Cost (Apr 1984)

(a) The parties estimate that performance of this contract, exclusive of any fee, will not cost the

Government more than (1) the estimated cost specified in the Schedule or, (2)if this is a cost-sharing

contract, the Government’s share of the estimated cost specified in the Schedule. The Contractor

agrees to use its best efforts to perform the work specified in the Schedule and all obligations under

this contract within the estimated cost, which, if this is a cost-sharing contract, includes both the

Government’s and the Contractor’s share of the cost.

(b) The Contractor shall notify the Contracting Officer in writing whenever it has reason to believe

that-

(1) The costs the Contractor expects to incur under this contract in the next 60 days, when added to

all costs previously incurred, will exceed 75 percent of the estimated cost specified in the Schedule;

or

(2) The total cost for the performance of this contract, exclusive of any fee, will be either greater or

substantially less than had been previously estimated.

(c) As part of the notification, the Contractor shall provide the Contracting Officer a revised estimate

of the total cost of performing this contract.

(d) Except as required by other provisions of this contract, specifically citing and stated to be an

exception to this clause-

(1) The Government is not obligated to reimburse the Contractor for costs incurred in excess of (i)

the estimated cost specified in the Schedule or, (ii)if this is a cost-sharing contract, the estimated

cost to the Government specified in the Schedule; and

(2) The Contractor is not obligated to continue performance under this contract (including actions

under the Termination clause of this contract) or otherwise incur costs in excess of the estimated

cost specified in the Schedule, until the Contracting Officer (i) notifies the Contractor in writing that

the estimated cost has been increased and (ii) provides a revised estimated total cost of performing

this contract. If this is a cost-sharing contract, the increase shall be allocated in accordance with the

formula specified in the Schedule.

(e) No notice, communication, or representation in any form other than that specified in paragraph

(d)(2) of this clause, or from any person other than the Contracting Officer, shall affect this

contract’s estimated cost to the Government. In the absence of the specified notice, the Government

is not obligated to reimburse the Contractor for any costs in excess of the estimated cost or, if this is

a cost-sharing contract, for any costs in excess of the estimated cost to the Government specified in

the Schedule, whether those excess costs were incurred during the course of the contract or as a

result of termination.

(f) If the estimated cost specified in the Schedule is increased, any costs the Contractor incurs
before the increase that are in excess of the previously estimated cost shall be allowable to the same

extent as if incurred afterward, unless the Contracting Officer issues a termination or other notice

directing that the increase is solely to cover termination or other specified expenses.

(g) Change orders shall not be considered an authorization to exceed the estimated cost to the

Government specified in the Schedule, unless they contain a statement increasing the estimated

cost.

(h) If this contract is terminated or the estimated cost is not increased, the Government and the

Contractor shall negotiate an equitable distribution of all property produced or purchased under the

contract, based upon the share of costs incurred by each.

(End of clause)

Parent topic: 52.232 [Reserved]