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FAR and DFARS › FAR Part 46: Quality Assurance › Subpart 46.7

FAR 46.707 Pricing aspects of fixed-price incentive contract warranties.

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 when a fixed-price incentive contract includes a warranty, the estimated cost of that warranty must be factored into setting the incentive target price and ceiling price. It also says all warranty costs are considered when setting the total final price, and any warranty compliance after that final price is set comes at no extra cost to the Government.

Applies to: Fixed-price incentive contracts that contain a warranty

What it requires

  • Consider the estimated cost of the warranty when establishing the incentive target price and ceiling price
  • Consider all costs incurred or estimated to be incurred in complying with the warranty when establishing the total final price
  • Perform warranty compliance after the total final price is established at no additional cost to the Government

Key terms: fixed-price incentive contract · warranty · incentive target price · ceiling price · total final price

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

The text

If a fixed-price incentive contract contains a warranty (see 46.708), the estimated cost of the warranty to the contractor should be considered in establishing the incentive target price and the ceiling price of the contract. All costs incurred, or estimated to be incurred, by the contractor in complying with the warranty shall be considered when establishing the total final price. Contractor compliance with the warranty after the establishment of the total final price shall be at no additional cost to the Government.

Sections it refers to

← 46.706 Warranty terms and conditions. · 46.708 Warranties of data. →

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

FAR 46.707 Pricing aspects of fixed-price incentive contract warranties · SpendQuery