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FAR and DFARS › FAR Part 16: Types of Contracts › Subpart 16.3

FAR 16.301-1 Description.

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 describes cost-reimbursement contracts, under which the contractor is paid for allowable incurred costs as set out in the contract. The contract includes an estimated total cost used to obligate funds and set a ceiling the contractor may not exceed without the contracting officer's approval, except at its own risk.

Applies to: Cost-reimbursement contracts and contractors working under them

What it requires

  • Do not exceed the contract's cost ceiling without the contracting officer's approval, unless doing so at your own risk

Key terms: cost-reimbursement · allowable incurred costs · estimate of total cost · obligating funds · ceiling

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

The text

Cost-reimbursement types of contracts provide for payment of allowable incurred costs, to the extent prescribed in the contract. These contracts establish an estimate of total cost for the purpose of obligating funds and establishing a ceiling that the contractor may not exceed (except at its own risk) without the approval of the contracting officer.

← 16.301 General. · 16.301-2 Application. →

Rule changes for FAR Part 16

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

FAR 16.301-1 Description · SpendQuery