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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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35 sections with “fee objective”

  • DFARS 215.404-75 Fee requirements for FFRDCs.
    … organizations that are FFRDCs, the contracting officer— (a) Should consider whether any fee is appropriate. Considerations shall include the FFRDC's— (1) Proportion of retained earnings (as established under generally accepted accounting…
  • 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 16.405-1 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…
  • DFARS 215.404-74 Fee requirements for cost-plus-award-fee contracts.
    In developing a fee objective for cost-plus-award-fee contracts, the contracting officer shall— (a) Follow the guidance in FAR 16.405-2 and 216.405-2; (b) Not use the weighted guidelines method or alternate structured approach; (c) Apply…
  • DFARS 216.401-71 Objective criteria.
    … measure contract performance. Objective criteria are associated with cost-plus-incentive-fee and fixed-price-incentive contracts. (2) When objective criteria exist but the contracting officer determines that it is in the best interest of …
  • DFARS 216.405-2 Cost-plus-award-fee contracts.
    (1) Award-fee pool. The award-fee pool is the total available award fee for each evaluation period for the life of the contract. The contracting officer shall perform an analysis of appropriate fee distribution to ensure at least 40 percent…
  • FAR 15.404-4 Profit.
    (a) General. This subsection prescribes policies for establishing the profit or fee portion of the Government prenegotiation objective in price negotiations based on cost analysis. (1) Profit or fee prenegotiation objectives do not necessa…
  • FAR 15.405 Price negotiation.
    …ccupied with any single element and should balance the contract type, cost, and profit or fee negotiated to achieve a total result—a price that is fair and reasonable to both the Government and the contractor. (c) The Government's cost obj…
  • FAR 15.406-1 Prenegotiation objectives.
    …hall document the pertinent issues to be negotiated, the cost objectives, and a profit or fee objective.
  • DFARS 215.404-72 Modified weighted guidelines method for nonprofit organizations other than FFRDCs.
    …fense or a Secretary of a Department as receiving sustaining support on a cost-plus-fixed-fee basis from a particular DoD department or agency, compute a fee objective for covered actions using the weighted guidelines method in 215.404-71, …
  • FAR 16.401 General.
    …ces, with improved delivery or technical performance, by relating the amount of profit or fee payable under the contract to the contractor's performance. Incentive contracts are designed to obtain specific acquisition objectives by— (1) Es…
  • FAR 16.404 Fixed-price contracts with award fees.
    Award-fee provisions may be used in fixed-price contracts when the Government wishes to motivate a contractor and other incentives cannot be used because contractor performance cannot be measured objectively. Such contracts shall establish …
  • FAR 42.1503 Procedures.
    …the tables 42-1 or 42-2 of this section. (c)(1) When the contract provides for incentive fees, the incentive-fee contract performance evaluation shall be entered into CPARS. (2) When the contract provides for award fee, the award fee-cont…
  • FAR 52.246-8 Inspection of Research and Development—Cost-Reimbursement.
    …ll be determined as specified in the Allowable Cost and Payment clause, but no additional fee shall be paid. The Contractor shall not tender for acceptance work required to be replaced or corrected without disclosing the former requirement …
  • FAR 52.244-2 Subcontracts.
    …rice objective and the price negotiated; and (G) A complete explanation of the incentive fee or profit plan when incentives are used. The explanation shall identify each critical performance element, management decisions used to quantify e…
  • DFARS 215.404-4 Profit.
    …acting officers shall use a structured approach for developing a prenegotiation profit or fee objective on any negotiated contract action when certified cost or pricing data is obtained, except for cost-plus-award-fee contracts (see 215.404…
  • FAR 48.102 Policies.
    …sis of competition. (e) Value engineering incentive payments do not constitute profit or fee within the limitations imposed by 10 U.S.C. 3322(b) and 41 U.S.C. 3905 (see 15.404-4(c)(4)(i). (f) Generally, profit or fee on the instant contac…
  • FAR 2.101 Definitions.
    …tment of Agriculture to be a commercial product or industrial product (other than food or feed) that is composed, in whole or in significant part, of biological products, including renewable domestic agricultural materials and forestry mate…
  • FAR 15.404-1 Proposal analysis techniques.
    …1) Cost analysis is the review and evaluation of any separate cost elements and profit or fee in an offeror's or contractor's proposal, as needed to determine a fair and reasonable price or to determine cost realism, and the application of …
  • FAR 15.406-3 Documenting the negotiation.
    …rd and review process for the instant contract action). (10) The basis for the profit or fee prenegotiation objective and the profit or fee negotiated. (11) Documentation of fair and reasonable pricing. (b) Whenever field pricing assista…
  • FAR 16.103 Negotiating contract type.
    … 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 performance. …
  • FAR 31.001 Definitions.
    …sts of operating an insurance or risk-management department, processing claims, actuarial fees, and service fees paid to insurance companies, trustees, or technical consultants. Intangible capital asset means an asset that has no physical …
  • FAR 52.227-11 Patent Rights—Ownership by the Contractor.
    …or decides not to continue the prosecution of any application for, to pay the maintenance fees on, or defend in reexamination or opposition proceeding on, a patent on a subject invention. (2) License. If the Contractor retains ownership of…
  • FAR 52.248-1 Value Engineering.
    …high as 75 percent for each VECP. 2 Same sharing arrangement as the contract's profit or fee adjustment formula. 3 The Contracting Officer may increase the Contractor's sharing rate to as high as 50 percent for each VECP. (g) Calculating…
  • FAR 1.102-2 Performance standards.
    …axpayer. (2) The System must be responsive and adaptive to customer needs, concerns, and feedback. Implementation of acquisition policies and procedures, as well as consideration of timeliness, quality and cost throughout the process, must…
  • FAR 3.104-1 Definitions.
    …FR 2638.202(b). Compensation means wages, salaries, honoraria, commissions, professional fees, and any other form of compensation, provided directly or indirectly for services rendered. Compensation is indirectly provided if it is paid to …
  • FAR 16.402-2 Performance incentives.
    … of the contractor's performance. These incentives should be designed to relate profit or fee to results achieved by the contractor, compared with specified targets. (b) To the maximum extent practicable, positive and negative performance …
  • FAR 27.302 Policy.
    …continue prosecution of a patent or plant variety protection application, pay maintenance fees, or defend in a reexamination or opposition proceeding on the patent; or (D) No longer desires to retain title. (2) For the purposes of this pa…
  • FAR 35.006 Contracting methods and contract type.
    …ce incentives is desirable and practicable, fixed-price incentive and cost-plus-incentive-fee contracts should be considered in that order of preference. (d) When levels of effort can be specified in advance, a short-duration fixed-price c…
  • FAR 46.308 Cost-reimbursement research and development contracts.
    …onsidered to be more appropriate. If it is contemplated that the contract will be on a no-fee basis, the contracting officer shall use the clause with its Alternate I.
  • FAR 52.248-2 Value Engineering—Architect-Engineer.
    …n architect-engineering contract the contractor shall— (1) Provide the Government with a fee breakdown schedule for the VE services (such as criteria review, task team review, and bid package review) included in the contract schedule; (2)…
  • DFARS 207.106 Additional requirements for major systems.
    …software. At a minimum the contracting officer shall— (i) Encourage the use of incentive fees and penalties as appropriate; and (ii) Allow the program manager or comparable requiring activity official exercising program management respons…
  • DFARS 215.404-71-3 Contract type risk and working capital adjustment.
    … working capital adjustment. (5) These types of contracts are considered cost-plus-fixed-fee contracts for the purposes of assigning profit values. They shall not receive the working capital adjustment in Block 25. However, they may receiv…
  • DFARS 242.7502 Policy.
    …ements affected by the deficiency; (iv) Reducing the negotiation objective for profit or fee; or (v) Including a contract (reopener) clause that provides for adjustment of the contract amount after award. (3) The contracting officer who …
  • DFARS 244.305-70 Policy.
    …s as a cost-reimbursable line item; (v) Reducing the negotiation objective for profit or fee; or (vi) Including a contract (reopener) clause that provides for adjustment of the contract amount after award. (3) The contracting officer who…

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.