XL EagleCeiling Price
Ceiling Price. A ceiling price is the top dollar amount the government will pay. On T&M and labor hour contracts, the contractor works at its own risk past the ceiling. On some incentive contracts, it caps the total price.
On IDIQ contracts, the ceiling is the most that can be ordered over the life of the contract. It is not a promise that much will ever be spent.
Why it matters to a small contractor
Do not confuse a big IDIQ ceiling with a big contract. Ask how much has actually been ordered.
Example
A T&M repair contract has a $75,000 ceiling. After $74,000 is billed, the contractor stops and asks for an increase before continuing.
Ceiling Price: common questions
Can a ceiling be raised?
Yes, by modification, if the contracting officer agrees and funds are available.
Do I get paid the ceiling?
No. You get paid for work actually done, up to the ceiling.
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