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FAR and DFARS › FAR Part 15: Contracting by Negotiation › Subpart 15.4

FAR 15.401 Definitions.

The codified text (eCFR, as of 2026-10-02). Under the Revolutionary FAR Overhaul ↗, agencies follow class deviations with new text for many parts while the formal rules go through the Federal Register: check the solicitation and your contract's clauses, which rule.

In plain English

This section defines two key terms used in the FAR subpart on contracting by negotiation: 'price' and 'subcontract.' For contractors, it clarifies that price includes cost plus any fee or profit, and that subcontracting can include transfers between related business units, which affects how subcontracting is treated under the regulations.

Applies to: Contractors and subcontractors involved in negotiated contracts

Key terms: Price · Subcontract · commercial products · commercial services

Written by AI from this section's text. A guide, not legal advice: the text below rules.

The text

As used in this subpart—

Price means cost plus any fee or profit applicable to the contract type.

Subcontract (except as used in 15.407-2) also includes a transfer of commercial products or commercial services between divisions, subsidiaries, or affiliates of a contractor or a subcontractor (10 U.S.C. 3701(2) and 41 U.S.C. 3501(a)(2).

Sections it refers to

← 15.400 Scope of subpart. · 15.402 Pricing policy. →

Rule changes for FAR Part 15

Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.

FAR 15.401 Definitions · SpendQuery