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Board Applies "Total Cost" Method Estimates; Claims Administration

Monday, October 03, 2005 04:11 pm

Board Applies "Total Cost" Method Estimates; Claims Administration

The Armed Services Board of Contract Appeals has ruled that when applying the "total cost" method of pricing a claim, a bid price is realistic if it reflects estimated direct costs plus overhead and profit.

The U.S. Naval Facilities Engineering Command awarded a contract to Environmental Safety Consultants, Inc. to remove, transport and dispose of sludge from two lagoons at the Naval Air Development Center in Warminster, Pa. The contract was fixed-price, but the pricing was based upon schedules of $95 per cubic yard for 1,400 cubic yards of sludge in lagoon number one and $165 per cubic yard for 525 cubic yards of sludge in lagoon number two.

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