Forward Pricing Rates Agreements are negotiated between which parties?

Forward Pricing Rates Agreements are negotiated between which parties?

• A. The contractor and Government
• B. The Government and the President
• C. The contractor and suppliers
• D. The Government and the Office of Management and Budget

Answer: (A)

Forward Pricing Rate Agreements establish the indirect-cost rates the government will use to price future work with a contractor on government contracts. They are negotiated between the contractor and the government (typically the cognizant contracting activity) to set rates for overhead, G&A, and similar costs that will apply to upcoming proposals. This arrangement speeds and stabilizes pricing across multiple contracts because those rates are pre-agreed rather than renegotiated for every new contract. The President, the Office of Management and Budget, or suppliers are not involved in these negotiations.

Forward Pricing Rate Agreements establish the indirect-cost rates the government will use to price future work with a contractor on government contracts. They are negotiated between the contractor and the government (typically the cognizant contracting activity) to set rates for overhead, G&A, and similar costs that will apply to upcoming proposals. This arrangement speeds and stabilizes pricing across multiple contracts because those rates are pre-agreed rather than renegotiated for every new contract. The President, the Office of Management and Budget, or suppliers are not involved in these negotiations.