§ 1816.404-271 - Base fee.

(a) A base fee shall not be used on CPAF service contracts for which the periodic award fee evaluations are final (1816.404-273(a)). Base fee normally shall not be used in other contracts, such as study, design, or hardware. However, the procurement officer may authorize the use of a base fee for these contracts by making a written determination that such use is in the best interest of the Government. In such cases, a base fee of no more than 3 percent of the estimated contract cost may be included in the contract.

(b) When a base fee is authorized for use in a CPAF contract, it shall be paid only if the final award fee evaluation is “satisfactory” or better. (See 1816.404-273 and 1816.404-275 for information on final evaluations and evaluation rating categories, respectively.) Pending final evaluation, the base fee may be paid during the life of the contract at defined intervals on a provisional basis. If the final award fee evaluation is “poor/unsatisfactory,” all provisional base fee payments shall be refunded to the Government.