SpendQueryBeta

FAR and DFARS › FAR Part 32: Contract Financing › Subpart 32.5

FAR 32.501-3 Contract price.

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 how the contract price is calculated for the purpose of making progress payments and setting the limit on those payments. It gives different rules depending on the contract type, such as firm-fixed-price, redeterminable, fixed-price incentive, letter contract, or unpriced order. It also states that the contracting officer cannot make progress payments or raise the contract price beyond the funds already obligated under the contract.

Applies to: Government contracts where progress payments are made or the limitation on progress payments is determined

What it requires

  • The contracting officer shall not make progress payments or increase the contract price beyond the funds obligated under the contract, as amended.

Key terms: progress payments · contract price · firm-fixed price contracts · unpriced modifications · letter contract

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

The text

(a) For the purpose of making progress payments and determining the limitation on progress payments, the contract price shall be as follows:

(1) Under firm-fixed price contracts, the contract price is the current amount fixed by the contract plus the not-to-exceed amount for any unpriced modifications.

(2) If the contract is redeterminable or subject to economic price adjustment, the contract price is the initial price until modified.

(3) Under a fixed-price incentive contract, the contract price is the target price plus the not-to-exceed amount of unpriced modifications. However, if the contractor's properly incurred costs exceed the target price, the contracting officer may provisionally increase the price up to the ceiling or maximum price.

(4) Under a letter contract, the contract price is the maximum amount obligated by the contract as modified.

(5) Under an unpriced order issued against a basic ordering agreement, the contract price is the maximum amount obligated by the order, as modified.

(6) Any portion of the contract specifically providing for reimbursement of costs only shall be excluded from the contract price.

(b) The contracting officer shall not make progress payments or increase the contract price beyond the funds obligated under the contract, as amended.

Sections that refer to it

← 32.501-2 Unusual progress payments. · 32.501-4 [Reserved] →

Rule changes for FAR Part 32

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

FAR 32.501-3 Contract price · SpendQuery