Common use of Target/Ceiling Costs Clause in Contracts

Target/Ceiling Costs. Costs will be referred to as the target cost. All estimates will contain an estimated ceiling cost. The ceiling cost may NOT be exceeded without authorization of the Department. When during the course of service and/or repair job, it becomes apparent that the ceiling costs will be exceeded, the Successful Contractor will immediately inform the Department who approved the estimate, and prepare a new estimate with a revised target cost and new ceiling cost. The revised estimate must be approved prior to incurring costs beyond the previously agreed upon ceiling cost.