Geyer International Inc. has submitted an REA as a result of a government-directed change order reducing the quantity of E170 Immunoassay Modules currently on contract. There were 3,000 units on the original contract, and the modification reduced the quantity by 1,000 units. In its first three production lots before the change, the company projected an Auc of 3.72 hours for the original effort. As a result of the change, the company projects an AUC of 4.18 hours to produce a reduced number of modules.

The only labor category impacted by this change is the assembly worker position. The wage for this contract is $38/hour, the G&A rate is 12%, the overhead rate for assembly is 150%, and the profit rate is 10%. What is the government negotiation position based on this information?

A. Increased contract price of $34,960

B. Increase contract price of $107,677

C. Decreased contract price of ($107,677)

D. Decreased contract price of ($34,960)