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48 CFR · Federal Acquisition Regulation and Defense supplement

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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.

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137 sections with “cost risk”: the first 40

  • DFARS 215.404-71-3 Contract type risk and working capital adjustment.
    (a) Description. The contract type risk factor focuses on the degree of cost risk accepted by the contractor under varying contract types. The working capital adjustment is an adjustment added to the profit objective for contract type risk.…
  • DFARS 249.501-70 Special termination costs.
    (a) The clause at 252.249-7000, Special Termination Costs, may be used in an incrementally funded contract when its use is approved by the agency head. (b) The clause is authorized when— (1) The contract term is 2 years or more; (2) The …
  • FAR 16.306 Cost-plus-fixed-fee contracts.
    (a) Description. A cost-plus-fixed-fee contract is a cost-reimbursement contract that provides for payment to the contractor of a negotiated fee that is fixed at the inception of the contract. The fixed fee does not vary with actual cost, b…
  • FAR 31.201-6 Accounting for unallowable costs.
    (a) Costs that are expressly unallowable or mutually agreed to be unallowable, including mutually agreed to be unallowable directly associated costs, shall be identified and excluded from any billing, claim, or proposal applicable to a Gove…
  • FAR 31.205-18 Independent research and development and bid and proposal costs.
    …opment, defined in this subsection. Basic research, (See 2.101). Bid and proposal (B&P) costs means the costs incurred in preparing, submitting, and supporting bids and proposals (whether or not solicited) on potential Government or non-G…
  • FAR 32.704 Limitation of cost or funds.
    (a)(1) When a contract contains the clause at 52.232-20, Limitation of Cost; or 52.232-22, Limitation of Funds, the contracting officer, upon learning that the contractor is approaching the estimated cost of the contract or the limit of the…
  • FAR 39.102 Management of risk.
    …into a contract for information technology, an agency should analyze risks, benefits, and costs. (See part 7 for additional information regarding requirements definition.) Reasonable risk taking is appropriate as long as risks are controlle…
  • FAR 49.603-3 Cost-reimbursement contracts—complete termination, if settlement includes cost.
    [Insert the following in Block 14 of SF 30 for settlement of cost-reimbursement contracts that are completely terminated, if settlement includes costs.] (a) This supplemental agreement settles the settlement proposal resulting from the Not…
  • FAR 49.603-4 Cost-reimbursement contracts—complete termination, with settlement limited to fee.
    [Insert the following in Block 14 of SF 30 for settlement of cost-reimbursement contracts that are completely terminated, if settlement is limited to fee.] (a) This supplemental agreement settles the amount of fee due under the contract, t…
  • DFARS 215.404-71-2 Performance risk.
    … of two parts: (1) Technical—the technical uncertainties of performance. (2) Management/cost control—the degree of management effort necessary— (i) To ensure that contract requirements are met; and (ii) To reduce and control costs. (b)…
  • DFARS 252.228-7001 Ground and Flight Risk.
    …ntire risk for damage, loss, or destruction of the previously covered aircraft; (ii) Any costs incurred by the Contractor (including the costs of the Contractor's self-insurance, insurance premiums paid to insure the Contractor's assumptio…
  • FAR 15.404-4 Profit.
    … or fee portion of the Government prenegotiation objective in price negotiations based on cost analysis. (1) Profit or fee prenegotiation objectives do not necessarily represent net income to contractors. Rather, they represent that elemen…
  • FAR 15.407-2 Make-or-buy programs.
    …anning, placing, and administering subcontracts as necessary to ensure the lowest overall cost and technical risk to the Government. When make-or-buy programs are required, the Government may reserve the right to review and agree on the con…
  • FAR 16.103 Negotiating contract type.
    …onsidered together. The objective is to negotiate a contract type and price (or estimated cost and fee) that will result in reasonable contractor risk and provide the contractor with the greatest incentive for efficient and economical perfo…
  • FAR 16.104 Factors in selecting contract types.
    …vide a realistic pricing standard should be carefully considered. (See 15.404-1(b).) (c) Cost analysis. In the absence of effective price competition and if price analysis is not sufficient, the cost estimates of the offeror and the Govern…
  • FAR 16.401 General.
    …ontract is not appropriate and the required supplies or services can be acquired at lower costs and, in certain instances, with improved delivery or technical performance, by relating the amount of profit or fee payable under the contract t…
  • DFARS 217.7404-6 Allowable profit.
    …ad of the contracting activity shall ensure the profit allowed reflects— (a) Any reduced cost risk to the contractor for costs incurred during contract performance before negotiation of the final price. However, if a contractor submits a q…
  • DFARS 243.204-70-6 Allowable profit.
    …ad of the contracting activity shall ensure the profit allowed reflects— (a) Any reduced cost risk to the contractor for costs incurred during contract performance before negotiation of the final price; (b) Any reduced cost risk to the co…
  • FAR 31.205-39 Service and warranty costs.
    Service and warranty costs include those arising from fulfillment of any contractual obligation of a contractor to provide services such as installation, training, correcting defects in the products, replacing defective parts, and making re…
  • DFARS 252.235-7001 Indemnification Under 10 U.S.C. 3861—Cost Reimbursement.
    … prescribed in 235.070-3, use the following clause: Indemnification Under 10 U.S.C. 3861—Cost Reimbursement (DEC 2022) (a) This clause provides for indemnification under 10 U.S.C. 3861 if the Contractor meets all the terms and conditions …
  • FAR 1.102-2 Performance standards.
    (a) Satisfy the customer in terms of cost, quality, and timeliness of the delivered product or service. (1) The principal customers for the product or service provided by the System are the users and line managers, acting on behalf of the A…
  • FAR 2.101 Definitions.
    … comprehensive plan for fulfilling the agency need in a timely manner and at a reasonable cost. It includes developing the overall strategy for managing the acquisition. Activity Address Code (AAC) means a distinct six-position code consis…
  • FAR 7.103 Agency-head responsibilities.
    …formality in the planning process is required as the acquisition becomes more complex and costly, including for cost-reimbursement and other high-risk contracts (e.g., other than firm-fixed-price contracts) requiring a written acquisition p…
  • FAR 7.105 Contents of written acquisition plans.
    …ements for compatibility with existing or future systems or programs; and (ii) Any known cost, schedule, and capability or performance constraints. (3) Cost. Set forth the established cost goals for the acquisition and the rationale suppo…
  • FAR 15.305 Proposal evaluation.
    …, and risks supporting proposal evaluation shall be documented in the contract file. (1) Cost or price evaluation. Normally, competition establishes price reasonableness. Therefore, when contracting on a firm-fixed-price or fixed-price wit…
  • FAR 15.404-1 Proposal analysis techniques.
    …evel of detail of the analysis required. (2) Price analysis shall be used when certified cost or pricing data are not required (see paragraph (b) of this subsection and 15.404-3). (3) Cost analysis shall be used to evaluate the reasonable…
  • FAR 15.405 Price negotiation.
    (a) The purpose of performing cost or price analysis is to develop a negotiation position that permits the contracting officer and the offeror an opportunity to reach agreement on a fair and reasonable price. A fair and reasonable price doe…
  • FAR 16.203-4 Contract clauses.
    …), upon approval by the chief of the contracting office. (c) Adjustments based on actual cost of labor or material. (1) The contracting officer shall, when contracting by negotiation, insert a clause that is substantially the same as the c…
  • FAR 16.403-1 Fixed-price incentive (firm target) contracts.
    (a) Description. A fixed-price incentive (firm target) contract specifies a target cost, a target profit, a price ceiling (but not a profit ceiling or floor), and a profit adjustment formula. These elements are all negotiated at the outset.…
  • FAR 16.505 Ordering.
    …all clearly describe all services to be performed or supplies to be delivered so the full cost or price for the performance of the work can be established when the order is placed. Orders shall be within the scope, issued within the period …
  • FAR 16.601 Time-and-materials contracts.
    …ices for which there is not a labor category specified in the contract; (3) Other direct costs (e.g., incidental services for which there is not a labor category specified in the contract, travel, computer usage charges, etc.); and (4) Ap…
  • FAR 17.106-1 General.
    …g requirements subject to cancellation. For example, consider that the total nonrecurring costs (see 15.408, Table 15-2, III. Formats for Submission of Line Item Summaries C(8)) are estimated at 10 percent of the total multiyear price, and …
  • FAR 22.1703 Policy.
    … and fringe benefits, the location of work, the living conditions, housing and associated costs (if employer or agent provided or arranged), any significant costs to be charged to the employee or potential employee, and, if applicable, the …
  • FAR 28.308 Self-insurance.
    (a) When it is anticipated that 50 percent or more of the self-insurance costs to be incurred at a segment of a contractor's business will be allocable to negotiated Government contracts, and the self-insurance costs at the segment for the …
  • FAR 31.001 Definitions.
    As used in this part— Accrued benefit cost method means an actuarial cost method under which units of benefits are assigned to each cost accounting period and are valued as they accrue; i.e., based on the services performed by each employe…
  • FAR 31.205-19 Insurance and indemnification.
    …surance, and charges for it shall comply with the provisions applicable to self-insurance costs in this subsection. However, if the captive insurer also sells insurance to the general public in substantial quantities and it can be demonstra…
  • FAR 35.006 Contracting methods and contract type.
    …applies in R&D contracting only to the extent that goals, objectives, specifications, and cost estimates are sufficient to permit such a preference. The precision with which the goals, performance objectives, and specifications for the work…
  • FAR 42.708 Quick-closeout procedure.
    …r responsible for contract closeout shall negotiate the settlement of direct and indirect costs for a specific contract, task order, or delivery order to be closed, in advance of the determination of final direct costs and indirect rates se…
  • FAR 44.202-2 Considerations.
    …esponsibility of the particular subcontractor? (8) Has the contractor performed adequate cost or price analysis or price comparisons and obtained certified cost or pricing data and data other than certified cost or pricing data? (9) Is th…
  • FAR 47.305-6 Shipments to ports and air terminals.
    …(3) When the delivery term is ex dock, pier, or warehouse, port of importation or c.& f. (cost & freight) destination, the required data shall include— (i) A delivery schedule in number of units and/or long or short tons; (ii) Maximum qua…

FAR (chapter 1)

DFARS (chapter 2, Defense)

Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Rule changes in progress: FAR, DFARS. Terms: glossary.