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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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71 sections with “fixed-price incentive contract”: the first 40

  • FAR 16.403 Fixed-price incentive contracts.
    (a) Description. A fixed-price incentive contract is a fixed-price contract that provides for adjusting profit and establishing the final contract price by application of a formula based on the relationship of total final negotiated cost to…
  • FAR 16.204 Fixed-price incentive contracts.
    A fixed-price incentive contract is a fixed-price contract that provides for adjusting profit and establishing the final contract price by a formula based on the relationship of final negotiated total cost to total target cost. Fixed-price …
  • FAR 46.707 Pricing aspects of fixed-price incentive contract warranties.
    If a fixed-price incentive contract contains a warranty (see 46.708), the estimated cost of the warranty to the contractor should be considered in establishing the incentive target price and the ceiling price of the contract. All costs incu…
  • DFARS 216.403 Fixed-price incentive contracts.
  • FAR 16.403-2 Fixed-price incentive (successive targets) contracts.
    (a) Description. (1) A fixed-price incentive (successive targets) contract specifies the following elements, all of which are negotiated at the outset: (i) An initial target cost. (ii) An initial target profit. (iii) An initial profit ad…
  • FAR 49.115 Settlement of terminated incentive contracts.
    (a) Fixed-price incentive contracts. The TCO shall settle terminated fixed-price incentive (FPI) contracts under the provisions of paragraph (j) of the clause at 52.216-16, Incentive Price Revision—Firm Target, and 52.249-2, Termination for…
  • DFARS 216.403-1 Fixed-price incentive (firm target) contracts.
    …plication. (1) The contracting officer shall give particular consideration to the use of fixed-price incentive (firm target) contracts, especially for acquisitions moving from development to production. (2) The contracting officer shall p…
  • 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 46.302 Fixed-price supply contracts.
    The contracting officer shall insert the clause at 52.246-2, Inspection of Supplies—Fixed-Price, in solicitations and contracts for supplies, or services that involve the furnishing of supplies, when a fixed-price contract is contemplated a…
  • FAR 15.408 Solicitation provisions and contract clauses.
    …cant value, the contracting officer shall use the clause with— (1) Its Alternate I, if a fixed-price incentive contract is contemplated; or (2) Its Alternate II, if a cost-plus-incentive-fee contract is contemplated. (b) Price Reduction …
  • FAR 46.710 Contract clauses.
    …pplies of a Noncomplex Nature, in solicitations and contracts for noncomplex items when a fixed-price supply contract is contemplated and the use of a warranty clause has been approved under agency procedures. If the contractor's design rat…
  • DFARS 216.403-2 Fixed-price incentive (successive targets) contracts.
    See PGI 216.403-2 for guidance on the use of fixed-price incentive (successive targets) contracts.
  • DFARS 215.404-71-3 Contract type risk and working capital adjustment.
    …is an adjustment added to the profit objective for contract type risk. It only applies to fixed-price contracts that provide for progress payments. Though it uses a formula approach, it is not intended to be an exact calculation of the cost…
  • FAR 12.207 Contract type.
    (a) Except as provided in paragraph (b) of this section, agencies shall use firm-fixed-price contracts or fixed-price contracts with economic price adjustment for the acquisition of commercial products or commercial services. (b)(1) A time…
  • FAR 16.103 Negotiating contract type.
    …tractor with the greatest incentive for efficient and economical performance. (b) A firm-fixed-price contract, which best utilizes the basic profit motive of business enterprise, shall be used when the risk involved is minimal or can be pr…
  • FAR 16.104 Factors in selecting contract types.
    …ce competition. Normally, effective price competition results in realistic pricing, and a fixed-price contract is ordinarily in the Government's interest. (b) Price analysis. Price analysis with or without competition, may provide a basis …
  • FAR 35.006 Contracting methods and contract type.
    …ng the recommendations of technical personnel. Although the Government ordinarily prefers fixed-price arrangements in contracting, this preference applies in R&D contracting only to the extent that goals, objectives, specifications, and cos…
  • 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 27.202-5 Solicitation provisions and contract clause.
    …he other offerors. (c) Insert the clause at 52.227-9, Refund of Royalties, in negotiated fixed-price solicitations and contracts when royalties may be paid under the contract. If a fixed-price incentive contract is contemplated, change “pr…
  • FAR 36.208 Concurrent performance of firm-fixed-price and other types of construction contracts.
    …adjustment features shall not be permitted concurrently, at the same work site, with firm-fixed-price, lump sum, or unit price contracts except with the prior approval of the head of the contracting activity.
  • FAR 52.230-6 Administration of Cost Accounting Standards.
    …prohibition provisions of CAS-covered contracts and subcontracts affected by the change. Fixed-price contracts and subcontracts means— (1) Fixed-price contracts and subcontracts described at FAR 16.202, 16.203, (except when price adjustme…
  • FAR 52.246-2 Inspection of Supplies—Fixed-Price.
    As prescribed in 46.302, insert the following clause: Inspection of Supplies—Fixed-Price (AUG 1996) (a) Definition. Supplies, as used in this clause, includes but is not limited to raw materials, components, intermediate assemblies, end p…
  • DFARS 246.710 Contract clauses.
    … (i) Use the basic clause in solicitations and contracts that are not firm-fixed price or fixed-price incentive. (ii) Use alternate I in fixed-price-incentive solicitations and contracts. (iii) Use alternate II in firm-fixed-price solicit…
  • FAR 15.305 Proposal evaluation.
    …ally, competition establishes price reasonableness. Therefore, when contracting on a firm-fixed-price or fixed-price with economic price adjustment basis, comparison of the proposed prices will usually satisfy the requirement to perform a p…
  • FAR 30.001 Definitions.
    …prohibition provisions of CAS-covered contracts and subcontracts affected by the change. Fixed-price contracts and subcontracts means— (1) Fixed-price contracts and subcontracts described at 16.202, 16.203 (except when price adjustments a…
  • FAR 31.103 Contracts with commercial organizations.
    …ermining costs under terminated contracts (see 49.103 and 49.113); (4) Price revision of fixed-price incentive contracts (see 16.204 and 16.403); (5) Price redetermination of price redetermination contracts (see 16.205 and 16.206); and (…
  • FAR 31.105 Construction and architect-engineer contracts.
    …ing, negotiating, or determining costs under terminated contracts; (4) Price revision of fixed-price incentive contracts; and (5) Pricing changes and other contract modifications. (d) Except as otherwise provided in this paragraph (d), t…
  • FAR 32.501-3 Contract price.
    …ic price adjustment, the contract price is the initial price until modified. (3) Under a fixed-price incentive contract, the contract price is the target price plus the not-to-exceed amount of unpriced modifications. However, if the contra…
  • FAR 42.802 Contract clause.
    …t 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 52.244-2 Subcontracts.
    … and changes and modifications to purchase orders. (b) When this clause is included in a fixed-price type contract, consent to subcontract is required only on unpriced contract actions (including unpriced modifications or unpriced delivery…
  • 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 16.406 Contract clauses.
    …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 a provisioning docume…
  • FAR 30.604 Processing changes to disclosed or established cost accounting practices.
    …es multiplied by the total estimated base computed for each of the following groups: (A) Fixed-price contracts and subcontracts. (B) Flexibly-priced contracts and subcontracts. (iii) Any other method that provides a reasonable approximat…
  • FAR 31.204 Application of principles and procedures.
    …d 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 fixed-ceiling-price contrac…
  • FAR 42.709-1 Scope.
    …posals; or (2) The final statement of costs incurred or estimated to be incurred under a fixed-price incentive contract. (b) This section applies to all contracts in excess of $1 million, except fixed-price contracts without cost incentiv…
  • FAR 42.709-7 Contract clause.
    …enalties for Unallowable Costs, in all solicitations and contracts over $1 million except fixed-price contracts without cost incentives or any firm-fixed-price contract for the purchase of commercial products or commercial services. General…
  • FAR 52.248-1 Value Engineering.
    … the term does not include quantities funded after VECP acceptance. If this contract is a fixed-price contract with prospective price redetermination, the term refers to the period for which firm prices have been established. Instant unit …
  • DFARS 212.7002 Policy.
    …e reasonably anticipated. (b) Notwithstanding FAR 12.207, contracting officers shall use fixed-price type contracts, including fixed-price incentive contracts, for awards resulting from a CSO. When using a fixed-price incentive contract, s…
  • DFARS 216.601 Time-and-materials contracts.
    …y; (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 for other than commercial product…
  • FAR 15.404-1 Proposal analysis techniques.
    … of the cost realism analysis. (3) Cost realism analyses may also be used on competitive fixed-price incentive contracts or, in exceptional cases, on other competitive fixed-price-type contracts when new requirements may not be fully under…

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.