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

FAR 15.407-5 Estimating systems.

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 using an acceptable estimating system helps both the Government and contractors by making proposals more accurate and reliable. It requires audit activities to review selected contractors' estimating systems and document the results in survey reports. If a contractor does not correct significant deficiencies, those deficiencies will be considered in later proposal analyses and negotiations.

Applies to: Selected contractors whose estimating systems are reviewed by cognizant audit activities

What it requires

  • Correct significant deficiencies identified in an estimating system survey report

Key terms: estimating system · survey report · cognizant audit activities · corrective action · significant deficiencies

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

The text

(a) Using an acceptable estimating system for proposal preparation benefits both the Government and the contractor by increasing the accuracy and reliability of individual proposals. Cognizant audit activities, when it is appropriate to do so, shall establish and manage regular programs for reviewing selected contractors' estimating systems or methods, in order to reduce the scope of reviews to be performed on individual proposals, expedite the negotiation process, and increase the reliability of proposals. The results of estimating system reviews shall be documented in survey reports.

(b) The auditor shall send a copy of the estimating system survey report and a copy of the official notice of corrective action required to each contracting office and contract administration office having substantial business with that contractor. Significant deficiencies not corrected by the contractor shall be a consideration in subsequent proposal analyses and negotiations.

← 15.407-4 Should-cost review. · 15.408 Solicitation provisions and contract clauses. →

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 15.407-5 Estimating systems · SpendQuery