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FAR and DFARS › DFARS Part 225: Foreign Acquisition › Subpart 225.73

DFARS 225.7303-4 Contingent fees.

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 when contingent fees are generally allowable on DoD contracts, and when they are not. It matters because it tells contractors when fees paid to help secure business can be reimbursed, and when foreign military sales rules make them unallowable.

Applies to: DoD contracts involving contingent fees, including foreign military sales

What it requires

  • Ensure contingent fees are paid to a bona fide employee or a bona fide established commercial or selling agency maintained by the prospective contractor for securing business
  • Ensure the contracting officer determines the fees are fair and reasonable
  • For certain listed countries, identify the payments and obtain the foreign customer's written approval before contract award if reimbursement is sought
  • For FMS to other countries, identify payments exceeding $50,000 per FMS case and obtain the foreign customer's written approval before contract award if reimbursement is sought

Key terms: contingent fees · bona fide employee · bona fide established commercial or selling agency · LOAs · FMS case

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

The text

(a) Except as provided in paragraph (b) of this subsection, contingent fees are generally allowable under DoD contracts, provided—

(1) The fees are paid to a bona fide employee or a bona fide established commercial or selling agency maintained by the prospective contractor for the purpose of securing business (see FAR Part 31 and FAR Subpart 3.4); and

(2) The contracting officer determines that the fees are fair and reasonable.

(b)(1) Under DoD 5105.38-M, LOAs for requirements for the governments of Australia, Taiwan, Egypt, Greece, Israel, Japan, Jordan, Republic of Korea, Kuwait, Pakistan, Philippines, Saudi Arabia, Turkey, Thailand, or Venezuela (Air Force) shall provide that all U.S. Government contracts resulting from the LOAs prohibit the reimbursement of contingent fees as an allowable cost under the contract, unless the contractor identifies the payments and the foreign customer approves the payments in writing before contract award (see 225.7307(a)).

(2) For FMS to countries not listed in paragraph (b)(1) of this subsection, contingent fees exceeding $50,000 per FMS case are unallowable under DoD contracts, unless the contractor identifies the payment and the foreign customer approves the payment in writing before contract award.

Sections it refers to

Sections that refer to it

← 225.7303-3 Government-to-government agreements. · 225.7303-5 Acquisitions wholly paid for from nonrepayable funds. →

Rule changes for DFARS Part 225

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

DFARS 225.7303-4 Contingent fees · SpendQuery