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FAR and DFARS › FAR Part 16: Types of Contracts › Subpart 16.6

FAR 16.603-4 Contract clauses.

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 tells the contracting officer which clauses to put into a letter contract and related solicitations. It matters to contractors because these clauses define when work starts, how much the Government can be held liable for, and how the contract gets definitized. It also covers payment of allowable costs before definitization in certain cost-reimbursement situations.

Applies to: Contracting officers preparing letter contracts and solicitations

What it requires

  • Include in each letter contract the clauses required for the contemplated definitive contract and any other appropriate clauses.
  • Insert the clause at 52.216-23, Execution and Commencement of Work, in solicitations and contracts when a letter contract is contemplated, except it may be omitted from letter contracts awarded on SF 26.
  • Insert the clause at 52.216-24, Limitation of Government Liability, with dollar amounts completed consistent with 16.603-2(d).
  • Insert the clause at 52.216-25, Contract Definitization, with paragraph (b) completed consistent with 16.603-2(c), and use Alternate I if the letter contract is awarded on the basis of price competition.

Key terms: letter contract · definitive contract · solicitations · certified cost or pricing data · cost-reimbursement definitive contract

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

The text

(a) The contracting officer shall include in each letter contract the clauses required by this regulation for the type of definitive contract contemplated and any additional clauses known to be appropriate for it.

(b) In addition, the contracting officer shall insert the following clauses in solicitations and contracts when a letter contract is contemplated:

(1) The clause at 52.216-23, Execution and Commencement of Work, except that this clause may be omitted from letter contracts awarded on SF 26;

(2) The clause at 52.216-24, Limitation of Government Liability, with dollar amounts completed in a manner consistent with 16.603-2(d); and

(3) The clause at 52.216-25, Contract Definitization, with its paragraph (b) completed in a manner consistent with 16.603-2(c). If at the time of entering into the letter contract, the contracting officer knows that the definitive contract will be based on adequate price competition or will otherwise meet the criteria of 15.403-1 for not requiring submission of certified cost or pricing data, the words “and certified cost or pricing data in accordance with FAR 15.408, Table 15-2 supporting its proposal” may be deleted from paragraph (a) of the clause. If the letter contract is being awarded on the basis of price competition, the contracting officer shall use the clause with its Alternate I.

(c) The contracting officer shall also insert the clause at 52.216-26, Payments of Allowable Costs Before Definitization, in solicitations and contracts if a cost-reimbursement definitive contract is contemplated, unless the acquisition involves conversion, alteration, or repair of ships.

Sections it refers to

  • 52.216-23 Execution and Commencement of Work.
  • 52.216-24 Limitation of Government Liability.
  • 16.603-2 Application.
  • 52.216-25 Contract Definitization.
  • 15.403-1 Prohibition on obtaining certified cost or pricing data (10 U.S.C. chapter 271 and 41 U.S.C. chapter 35).
  • 15.408 Solicitation provisions and contract clauses.
  • 52.216-26 Payments of Allowable Costs Before Definitization.

Sections that refer to it

  • 52.216-23 Execution and Commencement of Work.
  • 52.216-24 Limitation of Government Liability.
  • 52.216-25 Contract Definitization.
  • 52.216-26 Payments of Allowable Costs Before Definitization.

← 16.603-3 Limitations. · 16.701 Scope. →

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 16.603-4 Contract clauses · SpendQuery