Common use of Contract adjustment Clause in Contracts

Contract adjustment. The modification accepting the VECP (or a subsequent modification issued as soon as possible after any negotiations are completed) shall- (1) Reduce the contract price or estimated cost by the amount of instant contract savings, unless this is an incentive contract; (2) When the amount of instant contract savings is negative, increase the contract price, target price and ceiling price, target cost, or estimated cost by that amount; (3) Specify the Contractor’s dollar share per unit on future contracts, or provide the lump-sum payment; (4) Specify the amount of any Government costs or negative instant contract savings to be offset in determining net acquisition savings realized from concurrent or future contract savings; and (5) Provide the Contractor’s share of any net acquisition savings under the instant contract in accordance with the following: (i) Fixed-price contracts-add to contract price. (ii) Cost-reimbursement contracts-add to contract fee. (i) Concurrent and future contract savings. (1) Payments of the Contractor’s share of concurrent and future contract savings shall be made by a modification to the instant contract in accordance with paragraph (h)(5) of this clause. For incentive contracts, shares shall be added as a separate firm-fixed- price line item on the instant contract. The Contractor shall maintain records adequate to identify the first delivered unit for 3 years after final payment under this contract. (2) The Contracting Officer shall calculate the Contractor’s share of concurrent contract savings by-