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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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40 sections with “cost-reimbursement incentive contracts”

  • FAR 16.405 Cost-reimbursement incentive contracts.
    See 16.301 for requirements applicable to all cost-reimbursement contracts, for use in conjunction with the following subsections.
  • DFARS 216.405 Cost-reimbursement incentive contracts.
  • FAR 16.405-1 Cost-plus-incentive-fee contracts.
    (a) Description. The cost-plus-incentive-fee contract is a cost-reimbursement contract that provides for the initially negotiated fee to be adjusted later by a formula based on the relationship of total allowable costs to total target costs…
  • FAR 49.115 Settlement of terminated incentive contracts.
    …e terminated cost-plus-incentive-fee contracts under the clause at 52.249-6, Termination (Cost-Reimbursement). (1) Partial termination. Under a partial termination, the TCO shall limit the settlement to an adjustment of target fee as provi…
  • FAR 16.304 Cost-plus-incentive-fee contracts.
    A cost-plus-incentive-fee contract is a cost-reimbursement contract that provides for an initially negotiated fee to be adjusted later by a formula based on the relationship of total allowable costs to total target costs. Cost-plus-incentiv…
  • FAR 16.401 General.
    …es of incentive contracts are fixed-price incentive contracts (see 16.403 and 16.404) and cost-reimbursement incentive contracts (see 16.405). Since it is usually to the Government's advantage for the contractor to assume substantial cost r…
  • FAR 31.103 Contracts with commercial organizations.
    … commercial organizations as the basis for— (1) Determining reimbursable costs under (i) cost-reimbursement contracts and cost-reimbursement subcontracts under these contracts performed by commercial organizations and (ii) the cost-reimbur…
  • FAR 31.105 Construction and architect-engineer contracts.
    …in contracts in this category as the basis for— (1) Determining reimbursable costs under cost-reimbursement contracts, including cost-reimbursement subcontracts thereunder; (2) Negotiating indirect cost rates; (3) Proposing, negotiating,…
  • FAR 52.244-2 Subcontracts.
    …asing system, consent to subcontract is required for any subcontract that— (1) Is of the cost-reimbursement, time-and-materials, or labor-hour type; or (2) Is fixed-price and exceeds— (i) For a contract awarded by the Department of Defen…
  • DFARS 216.601 Time-and-materials contracts.
    … any reasonable degree of certainty; (3) Address why a cost-plus-fixed-fee term or other cost-reimbursement, incentive, or fixed-price contract or order is not appropriate; for contracts (including indefinite-delivery contracts) and orders…
  • DFARS 234.004 Acquisition strategy.
    …roceeding with Milestone B approval despite the high level of program risk; and (C) If a cost-reimbursement type contract is selected, the contract file shall include the milestone decision authority's written determination that— (1) The …
  • FAR 16.305 Cost-plus-award-fee contracts.
    A cost-plus-award-fee contract is a cost-reimbursement contract that provides for a fee consisting of (a) a base amount (which may be zero) fixed at inception of the contract and (b) an award amount, based upon a judgmental evaluation by th…
  • 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 16.307 Contract clauses.
    …the clause at 52.216-7, Allowable Cost and Payment, in solicitations and contracts when a cost-reimbursement contract or a time-and-materials contract (other than a contract for a commercial product or commercial service) is contemplated. I…
  • FAR 35.006 Contracting methods and contract type.
    …e in cost estimates) normally precludes using fixed-price contracting for R&D, the use of cost-reimbursement contracts is usually appropriate (see subpart 16.3). The nature of development work often requires a cost-reimbursement completion …
  • FAR 16.103 Negotiating contract type.
    … used at the outset. In particular, contracting officers should avoid protracted use of a cost-reimbursement or time-and-materials contract after experience provides a basis for firmer pricing. (d)(1) Each contract file shall include docum…
  • FAR 22.103-5 Contract clauses.
    … clause at 52.222-2, Payment for Overtime Premiums, in solicitations and contracts when a cost-reimbursement contract is contemplated and the contract amount is expected to exceed the simplified acquisition threshold; unless (a) a cost-reim…
  • FAR 42.703-1 Policy.
    …ing rates and final indirect cost rates shall be used in reimbursing indirect costs under cost-reimbursement contracts and in determining progress payments under fixed-price contracts. (c) To ensure compliance with 10 U.S.C. 3743(a) and 41…
  • FAR 52.215-2 Audit and Records—Negotiation.
    … the form of computer data, or in any other form. (b) Examination of costs. If this is a cost-reimbursement, incentive, time-and-materials, labor-hour, or price redeterminable contract, or any combination of these, the Contractor shall mai…
  • FAR 52.248-1 Value Engineering.
    …age paid the Contractor depends upon (1) this contract's type (fixed-price, incentive, or cost-reimbursement), (2) the sharing arrangement specified in paragraph (a) above (incentive, program requirement, or a combination as delineated in t…
  • DFARS 252.242-7005 Contractor business systems.
    …ntractor, in writing, to withhold 5 percent from its billings on interim cost vouchers on cost-reimbursement, labor-hour, and time-and-materials contracts until the Contracting Officer has determined that the Contractor has corrected all ma…
  • FAR 15.305 Proposal evaluation.
    …he otherwise successful offeror's price (see 15.403-1(c)(1)(i)(C)). When contracting on a cost-reimbursement basis, evaluations shall include a cost realism analysis to determine what the Government should realistically expect to pay for th…
  • FAR 15.404-1 Proposal analysis techniques.
    …bed in the offeror's technical proposal. (2) Cost realism analyses shall be performed on cost-reimbursement contracts to determine the probable cost of performance for each offeror. (i) The probable cost may differ from the proposed cost …
  • FAR 15.408 Solicitation provisions and contract clauses.
    …d as defined in section 2.101 and (2) The contemplated contract type is expected to be a cost-reimbursement type contract as defined in Subpart 16.3; or (B) For DoD, insert the clause when— (1) The total estimated contract or order value…
  • FAR 16.101 General.
    …types are grouped into two broad categories: fixed-price contracts (see subpart 16.2) and cost-reimbursement contracts (see subpart 16.3). The specific contract types range from firm-fixed-price, in which the contractor has full responsibil…
  • FAR 16.104 Factors in selecting contract types.
    …he contract type requires price revision while performance is in progress; or (2) When a cost-reimbursement contract is being considered and all current or past experience with the contractor has been on a fixed-price basis. See 42.302(a)(…
  • FAR 27.202-5 Solicitation provisions and contract clause.
    …rget cost and target profit” wherever it appears in the clause. The clause may be used in cost-reimbursement contracts where agency approval of royalties is necessary to protect the Government's interests.
  • FAR 30.001 Definitions.
    … contracts and subcontracts described at 16.203-1(a)(2), 16.204, 16.205, and 16.206; (2) Cost-reimbursement contracts and subcontracts (Subpart 16.3); (3) Incentive contracts and subcontracts where the price may be adjusted based on actua…
  • FAR 31.204 Application of principles and procedures.
    …ents are for costs incurred by the subcontractor that are consistent with this part: (i) Cost-reimbursement. (ii) Fixed-price incentive. (iii) Price redeterminable (i.e., fixed-price contracts with prospective price redetermination and f…
  • FAR 35.007 Solicitations.
    …ignificant evaluation criteria (e.g., unrealistically low cost estimates in proposals for cost-reimbursement or fixed-price incentive contracts). Although cost or price is not normally the controlling factor in selecting a contractor to per…
  • FAR 42.802 Contract clause.
    …se at 52.242-1, Notice of Intent to Disallow Costs, in solicitations and contracts when a cost-reimbursement contract, a fixed-price incentive contract, or a contract providing for price redetermination is contemplated.
  • FAR 48.104-2 Sharing acquisition savings.
    …multiplying the result by (1) 45 percent for fixed-price contracts; or (2) 75 percent for cost-reimbursement contracts. Value engineering sharing does not apply to incentive construction contracts.
  • FAR 52.230-6 Administration of Cost Accounting Standards.
    …tracts and subcontracts described at FAR 16.203-1(a)(2), 16.204, 16.205, and 16.206; (2) Cost-reimbursement contracts and subcontracts (FAR Subpart 16.3); (3) Incentive contracts and subcontracts where the price may be adjusted based on a…
  • FAR 52.242-1 Notice of Intent To Disallow Costs.
    …s prescribed in 42.802, insert the following clause in solicitations and contracts when a cost-reimbursement contract, a fixed-price incentive contract, or a contract providing for price redetermination is contemplated: Notice of Intent To…
  • FAR 52.243-7 Notification of Changes.
    …ce and cost wherever they appear in the clause, may be appropriately modified to apply to cost-reimbursement or incentive contracts, or to combinations thereof. (End of clause)
  • FAR 52.248-3 Value Engineering—Construction.
    …multiplying the result by (i) 45 percent for fixed-price contracts or (ii) 75 percent for cost-reimbursement contracts. (2) Payment. Payment of any share due the Contractor for use of a VECP on this contract shall be authorized by a modifi…
  • DFARS 209.104-1 General standards.
    (e) For cost-reimbursement or incentive type contracts, or contracts which provide for progress payments based on costs or on a percentage or stage of completion, the prospective contractor's accounting system and related internal controls …
  • DFARS 242.7502 Policy.
    (a) Contractors receiving cost-reimbursement, incentive type, time-and-materials, or labor-hour contracts, or contracts which provide for progress payments based on costs or on a percentage or stage of completion, shall maintain an accounti…
  • DFARS 242.7503 Contract clause.
    …counting System Administration, in solicitations and contracts when contemplating— (a) A cost-reimbursement, incentive type, time-and-materials, or labor-hour contract; or (b) A contract with progress payments made on the basis of costs i…
  • DFARS 253.209-1 Responsible prospective contractors.
    …contracting officer will request an accounting system review when soliciting and awarding cost-reimbursement or incentive type contracts, or contracts which provide for progress payments based on costs or on a percentage or stage of complet…

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.