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FAR and DFARS › FAR Part 36: Construction and Architect-engineer Contracts › Subpart 36.2

FAR 36.207 Pricing fixed-price construction 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 construction work is generally acquired using firm-fixed-price contracts, priced either as a lump sum, by unit prices, or a mix of both. It tells you when lump-sum pricing is preferred over unit pricing, and when a fixed-price contract with an economic price adjustment may be used.

Applies to: Contracting for construction work under fixed-price contracts

Key terms: firm-fixed-price contracts · lump-sum basis · unit-price basis · fixed-price contracts with economic price adjustment · contingency

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

The text

(a) Generally, firm-fixed-price contracts shall be used to acquire construction. They may be priced (1) on a lump-sum basis (when a lump sum is paid for the total work or defined parts of the work), (2) on a unit-price basis (when a unit price is paid for a specified quantity of work units), or (3) using a combination of the two methods.

(b) Lump-sum pricing shall be used in preference to unit pricing except when—

(1) Large quantities of work such as grading, paving, building outside utilities, or site preparation are involved;

(2) Quantities of work, such as excavation, cannot be estimated with sufficient confidence to permit a lump-sum offer without a substantial contingency;

(3) Estimated quantities of work required may change significantly during construction; or

(4) Offerors would have to expend unusual effort to develop adequate estimates.

(c) Fixed-price contracts with economic price adjustment may be used if such a provision is customary in contracts for the type of work being acquired, or when omission of an adjustment provision would preclude a significant number of firms from submitting offers or would result in offerors including unwarranted contingencies in proposed prices.

← 36.206 Liquidated damages. · 36.208 Concurrent performance of firm-fixed-price and other types of construction contracts. →

Rule changes for FAR Part 36

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

FAR 36.207 Pricing fixed-price construction contracts · SpendQuery