The point at which sharing changes to 0/100 is called the _____________, which represents a cost figure.

The Point of Total Assumption (PTA) is the specific cost point in a Fixed-Price Incentive (FPI) contract where the sharing arrangement for cost overruns effectively becomes 0/100 (Government/Contractor). Beyond this point, the contractor assumes 100% of all additional costs. The contract ceiling price is reached at the PTA, and for every dollar of cost overrun beyond this point, the contractor's profit is reduced by one dollar. This mechanism shifts the full cost risk for any further overruns to the contractor, making the contract behave like a Firm-Fixed-Price contract from that point forward.

A. Point of configuration: This term refers to the baseline established for a system's performance and design in configuration management, not a contractual cost point.

C. Pattern point: This is not a standard or recognized term in the context of contract pricing or incentive arrangements.

D. Prototype point: This refers to a stage in the product development lifecycle, not a financial threshold in a contract.

1. National Contract Management Association. (2019). Contract Management Body of Knowledge (CMBOK) (6th ed.). Section 2.3.3, "Fixed-Price Contracts," describes the elements of Fixed-Price Incentive (FPI) contracts, including the ceiling price and sharing lines that determine the Point of Total Assumption.

2. Defense Acquisition University (DAU). (2018). Contract Pricing Reference Guides, Volume 4: Advanced Issues in Contract Pricing. Chapter 3, "Incentive Contracting," pp. 15-18. This guide provides a detailed explanation and formula for calculating the PTA: PTA = [(Ceiling Price – Target Price) / Government Share Ratio] + Target Cost.

3. Federal Acquisition Regulation (FAR). (2023). Subpart 16.403-1, "Fixed-price incentive (firm target) contracts." This regulation outlines the contract elements (target cost, target profit, ceiling price, and profit adjustment formula) that are used to calculate and define the Point of Total Assumption.