(A) (1) The City of Mt. Vernon shall perfoiln cost or pricing analysis in connection with EVERY procurement action including contract modifications in accordance with the requirements of “Cost and Price Analysis for HUD Grantees and Funding Recipients”. Costs or prices based on estimated costs for Community Development Assistance Program projects shall be allowed only to the extent that the costs incurred or the cost estimates included in negotiated prices are consistent with federal cost principals[ 48 CFR Part 31].
(2) Lump sum prices will only be utilized when there is a definable work product and the quantity to be provided is certain and the contractor assumes all the risk for costs incurred. Unit prices can be utilized when there is a definable work product and the contractor assume all the risk for costs incurred, but the quantity is estimated. Cost reimbursement will be utilized when the task does not result in a definable work product or the contractor will not assume the risk of incurring the cost to complete the task. Cost reimbursement, unit or lump sum price, or a combination thereof may be utilized as appropriate.
(B) A cost reimbursement type contract is most appropriate when the scope and extent of the work to be performed are not clearly defined, such as a professional services contract. A cost reimbursement contract MUST clearly establish a cost ceiling which may not be exceeded without a contract modification, increasing specific dollar amounts for the tasks set forth in the existing scope of the work and in accordance with the original solicitation.
(C) A fixed price contract is appropriate when the scope of work is very well defined and product oriented. A fixed price contract can only be awarded when fair and reasonable prices can be established through adequate price competition and the solicitation is based principally on price. A fixed price contract MUST establish a guaranteed price that may not be increased.
(D) Cost plus percentage of cost and percentage of construction cost methods of contracting MUST NOT be used.
(Ord. 2024-07, passed 3-4-2024)