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FAR and DFARS › FAR Part 31: Contract Cost Principles and Procedures › Subpart 31.1

FAR 31.102 Fixed-price 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

This section says that the cost principles in FAR Part 31 must be used when pricing fixed-price contracts, subcontracts, and modifications if cost analysis is performed or if a contract clause requires costs to be determined or negotiated. It also clarifies that using these cost principles does not mean the parties must agree on each individual cost element—the final agreement is only on the total price. The goal remains negotiating fair and reasonable prices, considering cost and other factors.

Applies to: Fixed-price contracts, subcontracts, and modifications to them

What it requires

  • Use applicable subparts of Part 31 when pricing fixed-price contracts, subcontracts, and modifications if cost analysis is performed or a clause requires cost determination or negotiation

Key terms: cost analysis · fixed-price contract · cost principles · fair and reasonable · total price

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

The text

The applicable subparts of part 31 shall be used in the pricing of fixed-price contracts, subcontracts, and modifications to contracts and subcontracts whenever (a) cost analysis is performed, or (b) a fixed-price contract clause requires the determination or negotiation of costs. However, application of cost principles to fixed-price contracts and subcontracts shall not be construed as a requirement to negotiate agreements on individual elements of cost in arriving at agreement on the total price. The final price accepted by the parties reflects agreement only on the total price. Further, notwithstanding the mandatory use of cost principles, the objective will continue to be to negotiate prices that are fair and reasonable, cost and other factors considered.

Sections that refer to it

  • 31.204 Application of principles and procedures.

← 31.101 Objectives. · 31.103 Contracts with commercial organizations. →

Rule changes for FAR Part 31

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

FAR 31.102 Fixed-price contracts · SpendQuery