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

FAR 15.406-1 Prenegotiation objectives.

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 explains that prenegotiation objectives set the Government's starting position for negotiations and help the contracting officer decide whether a price is fair and reasonable. They must be based on the contracting officer's analysis of the offeror's proposal and other relevant information. The contracting officer must establish these objectives before negotiating any pricing action.

Applies to: Contracting officers negotiating pricing actions

What it requires

  • Establish prenegotiation objectives before negotiating any pricing action
  • When cost analysis is required, document the pertinent issues to be negotiated, the cost objectives, and a profit or fee objective

Key terms: prenegotiation objectives · fair and reasonable price · cost analysis · profit or fee objective · pricing action

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

The text

(a) The prenegotiation objectives establish the Government's initial negotiation position. They assist in the contracting officer's determination of fair and reasonable price. They should be based on the results of the contracting officer's analysis of the offeror's proposal, taking into consideration all pertinent information including field pricing assistance, audit reports and technical analysis, fact-finding results, independent Government cost estimates and price histories.

(b) The contracting officer shall establish prenegotiation objectives before the negotiation of any pricing action. The scope and depth of the analysis supporting the objectives should be directly related to the dollar value, importance, and complexity of the pricing action. When cost analysis is required, the contracting officer shall document the pertinent issues to be negotiated, the cost objectives, and a profit or fee objective.

← 15.406 Documentation. · 15.406-2 Certificate of current cost or pricing data. →

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 15.406-1 Prenegotiation objectives · SpendQuery