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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9 sections with “initial target profit”

  • FAR 16.403-2 Fixed-price incentive (successive targets) contracts.
    …ract 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 adjustment formula to be used for establishing the firm target profit, i…
  • FAR 52.216-17 Incentive Price Revision—Successive Targets.
    …ling price of ___ dollars ($___). The prices of these items shown in the Schedule are the initial target prices, which include an initial target profit of ___ [Contracting Officer insert percent] percent of the initial target cost. Any supp…
  • FAR 52.203-10 Price or Fee Adjustment for Illegal or Improper Activity.
    …educe the contract target price and contract target profit both by an amount equal to the initial target profit specified in the contract at the time of contract award; or (ii) If an immediate adjustment to the contract target price and co…
  • FAR 16.403-1 Fixed-price incentive (firm target) contracts.
    … pricing information for establishing reasonable firm targets is available at the time of initial contract negotiation. (d) Contract Schedule. The contracting officer shall specify in the contract Schedule the target cost, target profit, a…
  • FAR 52.216-16 Incentive Price Revision—Firm Target.
    …been established; (iii) The portion of the total target profit (used in establishing the initial contract price or agreed to for the purpose of this paragraph (g)) that is in direct proportion to the supplies delivered (or services perform…
  • DFARS 244.305-70 Policy.
    …etail to allow the contracting officer to understand the weaknesses or deficiencies. (2) Initial determination. (i) The contracting officer shall review all findings and recommendations and, if there are no material weaknesses, shall promp…
  • FAR 32.503-9 Liquidation rates—alternate method.
    …eration for these contract modifications is provided by the consideration included in the initial contract. The parties shall promptly make the payment or liquidation required in the circumstances.
  • FAR 52.226-1 Utilization of Indian Organizations and Indian-Owned Economic Enterprises.
    …rcent of the estimated cost, target cost, or firm-fixed-price included in the subcontract initially awarded to the Indian organization or Indian-owned economic enterprise. (4) The Contractor has the burden of proving the amount claimed and…
  • DFARS 215.404-71-2 Performance risk.
    …antly above normal. (iii) The following may justify a maximum value— (A) Development or initial production of a new item, particularly if performance or quality specifications are tight; or (B) A high degree of development or production …

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.