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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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24 sections with “firm target cost”

  • 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 16.403-2 Fixed-price incentive (successive targets) contracts.
    …arget profit. (iii) An initial profit adjustment formula to be used for establishing the firm target profit, including a ceiling and floor for the firm target profit. (This formula normally provides for a lesser degree of contractor cost r…
  • FAR 52.216-17 Incentive Price Revision—Successive Targets.
    …n (FAR) in effect on the date of this contract. (c) Submitting data for establishing the firm fixed price or a final profit adjustment formula. (1) Within __ [Contracting Officer insert number of days] days after the end of the month in wh…
  • FAR 52.216-16 Incentive Price Revision—Firm Target.
    As prescribed in 16.406(a), insert the following clause: Incentive Price Revision—Firm Target (JAN 2022) (a) General. The supplies or services identified in the Schedule as Items ___ [Contracting Officer insert Schedule line item numbers]…
  • FAR 16.306 Cost-plus-fixed-fee contracts.
    …bability that the development is achievable and the Government has established reasonably firm performance objectives and schedules. (c) Limitations. No cost-plus-fixed-fee contract shall be awarded unless the contracting officer complies …
  • FAR 52.212-3 Offeror Representations and Certifications—Commercial Products and Commercial Services.
    …solicitation; and (ii) It □ has, □ has not filed all required compliance reports. (2) Affirmative Action Compliance. The offeror represents that— (i) It □ has developed and has on file, □ has not developed and does not have on file, at e…
  • FAR 52.248-1 Value Engineering.
    … contract with prospective price redetermination, the term refers to the period for which firm prices have been established. Instant unit cost reduction means the amount of the decrease in unit cost of performance (without deducting any Co…
  • FAR 16.201 General.
    (a) Fixed-price types of contracts provide for a firm price or, in appropriate cases, an adjustable price. Fixed-price contracts providing for an adjustable price may include a ceiling price, a target price (including target cost), or both.…
  • FAR 16.403 Fixed-price incentive contracts.
    …rice ceiling, negotiated at the outset. The two forms of fixed-price incentive contracts, firm target and successive targets, are further described in 16.403-1 and 16.403-2 below. (b) Application. A fixed-price incentive contract is approp…
  • FAR 16.406 Contract clauses.
    (a) Insert the clause at 52.216-16, Incentive Price Revision—Firm Target, in solicitations and contracts when a fixed-price incentive (firm target) contract is contemplated. If the contract calls for supplies or services to be ordered under…
  • FAR 49.115 Settlement of terminated incentive contracts.
    …nder the provisions of paragraph (j) of the clause at 52.216-16, Incentive Price Revision—Firm Target, and 52.249-2, Termination for Convenience of the Government (Fixed-Price). (1) Partial termination. Under a partially terminated contrac…
  • FAR 52.226-1 Utilization of Indian Organizations and Indian-Owned Economic Enterprises.
    …et cost and ceiling price of a fixed-price incentive prime contract. (iv) The price of a firm-fixed-price prime contract. (3) The amount of the adjustment to the prime contract is 5 percent of the estimated cost, target cost, or firm-fixe…
  • DFARS 244.305-70 Policy.
    …cted proposal; (ii) Considering another type of contract, e.g., a fixed-price incentive (firm target) contract instead of firm-fixed-price; (iii) Using additional cost analysis techniques to determine the reasonableness of the cost elemen…
  • DFARS 252.246-7001 Warranty of data.
    …the Contractor's liability shall be— (A) Ten percent of the total subcontract price in a firm-fixed-price subcontract; (B) Seventy-five percent of the total subcontract fee in a cost-plus-fixed-fee or cost-plus-award-fee subcontract; or …
  • FAR 16.401 General.
    (a) Incentive contracts as described in this subpart are appropriate when a firm-fixed-price contract is not appropriate and the required supplies or services can be acquired at lower costs and, in certain instances, with improved delivery …
  • FAR 31.205-6 Compensation for personal services.
    …relevant include, but are not limited to, conformity with compensation practices of other firms— (i) Of the same size; (ii) In the same industry; (iii) In the same geographic area; and (iv) Engaged in similar non-Government work under c…
  • FAR 32.501-3 Contract price.
    …g the limitation on progress payments, the contract price shall be as follows: (1) Under firm-fixed price contracts, the contract price is the current amount fixed by the contract plus the not-to-exceed amount for any unpriced modification…
  • FAR 48.104-2 Sharing acquisition savings.
    …current and future contract savings and of collateral savings shall be paid as a separate firm-fixed-price line item on the instant contract. (5) Within 3 months after concurrent contracts have been modified to reflect price reductions att…
  • FAR 48.104-3 Sharing collateral savings.
    …ized during a typical year of use but must not exceed the greater of— (1) The contract's firm-fixed-price, target price, target cost, or estimated cost, at the time the VECP is accepted; or (2) $100,000. (c) The contracting officer must …
  • FAR 52.203-10 Price or Fee Adjustment for Illegal or Improper Activity.
    …f contract award and such reduced price shall be the total final contract price. (5) For firm-fixed-price contracts, by 10 percent of the initial contract price or a profit amount determined by the Contracting Officer from records or docum…
  • FAR 52.215-9 Changes or Additions to Make-or-Buy Program.
    …on in the contract price in accordance with paragraph (k) of the Incentive Price Revision—Firm Target clause or paragraph (m) of the Incentive Price Revision—Successive Targets clause of this contract. Alternate II (OCT 2010). As prescribe…
  • FAR 52.216-25 Contract Definitization.
    …esulting from this letter contract will include a negotiated ___ [insert price ceiling or firm fixed price] in no event to exceed ___ [insert the proposed price upon which the award was based].
  • DFARS 234.004 Acquisition strategy.
    … approval requirements for cost-reimbursement contracts. (iv) For fixed-price incentive (firm target) contracts, contracting officers shall comply with the guidance provided at PGI 216.403-1(1)(ii)(B) and (C). (v) In accordance with secti…
  • DFARS 252.217-7027 Contract Definitization.
    …definitized contract action will include a negotiated___ [insert “cost/price ceiling” or “firm-fixed price”] in no event to exceed__[insert the not-to-exceed amount]. (End of clause)

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.