FPIF Help

Submitted by kunderki on Wed, 06/19/2013 - 14:12

Does anyone understand how to calculate buyer's share, seller's share, adjusted fee and contract price for a Fixed Price Incentive Fee contract? 


Target Cost: $618 million
Target Fee: $79 million
Target Price: $697 million
Ceiling Price: $772 million
Share ratio: 70/30 (buyer/seller)
Schedule incentive: $1.25 million/month


 


Scenario 1:
Project Cost = $525 million

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cnppmp's picture

cnppmp

Wed, 06/19/2013 - 16:18

I think the question should be for CPIF, as PTA is used for CPIF only.

 

Just in acse if you find below formulas interesting to you.

  • Final Fee= (target cost-actual cost)*sellers ratio+ target Fee
  • Final price = Actual cost +Final Fee

(Target price =Target cost +Incentive fee or target fee, in case Target price not given)

if the Ceiling price is mentioned then you should compare the Final price with Ceiling price,

If Ceiling price is >Final price then Final price need to be considered, else Ceiling price shoudl be considered.

 

Regards

CN Patil

 

kunderki

Wed, 06/19/2013 - 18:33

so are there formulas out there to calculate adjusted fee, buyer/seller share and contract price?  I was told there was. 

cnppmp's picture

cnppmp

Thu, 06/20/2013 - 03:02

can you post the original question you encountered. The above question you posted is in your own words, I'm talking about the text part of the question.

Regards

CN Patil

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