48 C.F.R. § 52.232-20

52.232-20 Limitation of Cost.

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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 subparagraph (d)(2) above, 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) [48 FR 42478, Sept. 19, 1983, as amended at 72 FR 27389, May 15, 2007; 78 FR 37689, June 21, 2013]

Notes of Decisions

Cited in 13 cases, 1997–2011 · leading case: Cherokee Nation of Okla. v. Leavitt, 543 U.S. 631 (2005).

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Cherokee Nation of Okla. v. Leavitt, 543 U.S. 631 (2005). · cites it 2× “, 48 CFR § 52.232-20 (d)(2) (2004) (sample "Limitation of Cost" clause); see generally W.”

Scan-Tech Sec., L.P. v. United States, 46 Fed. Cl. 326 (Fed. Cl. 2000). · cites it 4× “at 931-36 ; see 48 C.F.R. § 52.232-20 (1989) (LOC); 48 C.”

Fluor Enter., Inc. v. United States, 64 Fed. Cl. 461 (Fed. Cl. 2005). · cites it 3× “” See 48 C.F.R. § 52.232-20 (Limitation of Cost); Compl.”

Die Casters Int'l, Inc. v. United States, 73 Fed. Cl. 174 (Fed. Cl. 2006). · cites it 4× “48 C.F.R. § 52.232-20 (cited in DX 1, vol.”

Int'l Sci. & Tech. Inst., Inc. v. United States, 53 Fed. Cl. 798 (Fed. Cl. 2002). · cites it 5× “48 C.F.R. § 52.232-20 (b), (c). Additionally, the LOF/LOC clauses states that the Government was not obligated to reimburse a contract for costs incurred beyond the funds allotted to the contract or the total estimated cost of the contract, unless the contracting officer…”

Gen. Motors Corp. v. United States, 66 Fed. Cl. 153 (Fed. Cl. 2005). · cites it 2× “” 48 C.F.R. § 52.232-20 (e). The Limitation of Funds clause provides that the government’s liability for a contract is limited to the “total amount allotted by the Government to th[e] contract.”

Viacom, Inc. v. United States, 70 Fed. Cl. 649 (Fed. Cl. 2006). · cites it 2× “The government argues that its payment obligation is limited to the maximum amounts recoverable under the FAR’s mandatory Limitation of Cost and Limitation of Funds clauses, 48 C.F.R. §§ 52.232-20 and 52.232-22. As discussed in General Motors, under the Limitation of Cost…”

Advanced Materials, Inc. v. William J. Perry, Sec'y of Def., 108 F.3d 307 (Fed. Cir. 1997). “The contract incorporated by reference the “Limitation of Cost” provision (cost limitation provision) in Federal Acquisition Regulation, 48 C.F.R. § 52.232-20 . That provision stated that “[t]he Government is not obligated to reimburse the contractor for costs incurred in excess…”

Titan Corp. v. Togo D. West, Jr., Sec'y of the Army, 129 F.3d 1479 (Fed. Cir. 1997). “232-20, 48 C.F.R. § 52.232-20 , which limits the government’s payment to the costs as originally estimated unless the contractor notifies the government of any prospective overrun in advance.”

Die Casters Int'l, Inc. v. United States, 67 Fed. Cl. 362 (Fed. Cl. 2005). · cites it 2× “48 C.F.R. § 52.232-20 . On January 30, 1996, Scott G.”

Int'l Tech. Corp. v. Winter, 523 F.3d 1341 (Fed. Cir. 2008). “The contract did not describe the services to be performed, but instead provided that services would be specified in a series of subsequent delivery orders. Because the contract was awarded on a cost-plus-fixed-fee basis, the contract contained the “Limitation of Cost” provision…”

Int'l Sci. & Tech. Inst., Inc. v. United States, 53 Fed. Cl. 1 (Fed. Cl. 2002). “(“LOC”), 48 C.F.R. § 52.232-20 . A party may file a motion to reconsider under RCFC 59(a).”

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