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

FAR 16.303 Cost-sharing contracts.

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

A cost-sharing contract is a cost-reimbursement contract where the contractor gets no fee and is reimbursed only for an agreed-upon portion of allowable costs. It may be used when the contractor agrees to absorb part of the costs in expectation of substantial compensating benefits. Other limitations are found in 16.301-3.

Applies to: Contractors under cost-sharing contracts

Key terms: cost-sharing contract · cost-reimbursement contract · fee · allowable costs · compensating benefits

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

The text

(a) Description. A cost-sharing contract is a cost-reimbursement contract in which the contractor receives no fee and is reimbursed only for an agreed-upon portion of its allowable costs.

(b) Application. A cost-sharing contract may be used when the contractor agrees to absorb a portion of the costs, in the expectation of substantial compensating benefits.

(c) Limitations. See 16.301-3.

Sections it refers to

Sections that refer to it

← 16.302 Cost contracts. · 16.304 Cost-plus-incentive-fee contracts. →

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 16.303 Cost-sharing contracts · SpendQuery