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FAR and DFARS › FAR Part 52: Solicitation Provisions and Contract Clauses › Subpart 52.2

FAR 52.216-11 Cost Contract—No Fee.

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 is used in cost-reimbursement contracts where the contractor receives no fee. It lets the Contracting Officer withhold further payment of allowable costs once 80 percent of the estimated cost has been paid, until a reserve is set aside to protect the Government's interest. The reserve is capped at the lesser of one percent of estimated cost or $100,000.

Applies to: Cost-reimbursement contracts that provide no fee and are not cost-sharing contracts

What it requires

  • Understand that no fee will be paid for performing the contract
  • Accept that after 80 percent of estimated cost is paid, the Contracting Officer may withhold further payment of allowable cost until a reserve is set aside

Key terms: fee · cost-reimbursement contract · cost-sharing contract · reserve · allowable cost

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

The text

As prescribed in 16.307(e), insert the following clause in solicitations and contracts when a cost-reimbursement contract is contemplated that provides no fee and is not a cost-sharing contract. This clause may be modified by substituting $10,000 in lieu of $100,000 as the maximum reserve in paragraph (b) if the Contractor is a nonprofit organization.

Cost Contract—No Fee (APR 1984)

(a) The Government shall not pay the Contractor a fee for performing this contract.

(b) After payment of 80 percent of the total estimated cost shown in the Schedule, the Contracting Officer may withhold further payment of allowable cost until a reserve is set aside in an amount that the Contracting Officer considers necessary to protect the Government's interest. This reserve shall not exceed one percent of the total estimated cost shown in the Schedule or $100,000, whichever is less.

(End of clause)

Alternate I (APR 1984). In a contract for research and development with an educational institution or a nonprofit organization, for which the contracting officer has determined that withholding of a portion of allowable costs is not required, delete paragraph (b) of the basic clause.

Sections it refers to

Sections that refer to it

← 52.216-10 Incentive Fee. · 52.216-12 Cost-Sharing Contract—No Fee. →

Rule changes for FAR Part 52

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

FAR 52.216-11 Cost Contract—No Fee · SpendQuery