Charges and cost monitoring entail the periodic review of the overall cost of the contract to ensure that budgets are maintained. All supplier and internal costs, including the costs of contract management, must be monitored by the pricing analyst on a regular basis, especially when changes are made, to ensure reasonableness and best value of the contract. The purchase/SCM team and supplier will agree upon a method by which the charges and costs will be monitored. This will usually be in the form of an invoice or report sent from the supplier to the CO, or to the COR, on an agreed upon basis (e.g., weekly, monthly, quarterly reports).
Charges and costs are incurred for fixed-price contracts when a change is made involving any deviation from the fixed costs set forth in the contract. If the costs are exceeded by the Postal Service, the Postal Service is responsible for absorbing those costs because they are fixed in the contract, and if the costs are exceeded by the supplier, the supplier will absorb those costs, again because they are fixed in the contract.
Additional or unforeseen costs will be handled in a manner dependent upon the type of contract, terms determined during discussions with the supplier, or the dispute procedures contained in Clause B-9: Claims and Disputes. A discussion of contract types can be found in Section 2-18, Select Contract Type.
