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FAR and DFARS › DFARS Part 252: Solicitation Provisions and Contract Clauses › Subpart 252.2

DFARS 252.225-7027 Restriction on contingent fees for foreign military sales.

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 clause addresses when contingent fees are allowable costs under a contract involving foreign military sales. Generally, fees paid to a contractor's bona fide employee or a bona fide established commercial or selling agency are allowable. However, for foreign military sales, fees are unallowable unless the foreign customer identified them and approved payment in writing before contract award, with specific limits depending on the country.

Applies to: Contractors with foreign military sales contracts containing this clause

What it requires

  • Ensure contingent fees are paid only to a bona fide employee or a bona fide established commercial or selling agency to be generally allowable
  • For foreign military sales, obtain written identification and approval of contingent fees from the foreign customer before contract award to avoid unallowability

Key terms: contingent fees · foreign military sales · bona fide employee · bona fide established commercial or selling agency · allowable cost

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

The text

As prescribed in 225.7307(a), use the following clause.

Restriction on Contingent Fees for Foreign Military Sales (APR 2003)

(a) Except as provided in paragraph (b) of this clause, contingent fees, as defined in the Covenant Against Contingent Fees clause of this contract, are generally an allowable cost, provided the fees are paid to—

(1) A bona fide employee of the Contractor; or

(2) A bona fide established commercial or selling agency maintained by the Contractor for the purpose of securing business.

(b) For foreign military sales, unless the contingent fees have been identified and payment approved in writing by the foreign customer before contract award, the following contingent fees are unallowable under this contract:

(1) For sales to the Government(s) of ____________________________, contingent fees in any amount.

(2) For sales to Governments not listed in paragraph (b)(1) of this clause, contingent fees exceeding $50,000 per foreign military sale case.

(End of clause)

Sections it refers to

Sections that refer to it

  • 212.301 Solicitation provisions and contract clauses for the acquisition of commercial products and commercial services.
  • 225.7307 Contract clauses.

← 252.225-7026 Acquisition Restricted to Products or Services from Afghanistan. · 252.225-7028 Exclusionary policies and practices of foreign governments. →

Rule changes for DFARS Part 252

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

DFARS 252.225-7027 Restriction on contingent fees for foreign military sales · SpendQuery