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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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22 sections with “profit or fee objective”

  • 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…
  • DFARS 215.404-4 Profit.
    … (1) Contracting 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 (s…
  • DFARS 215.404-72 Modified weighted guidelines method for nonprofit organizations other than FFRDCs.
    (a) Definition. As used in this subpart, a nonprofit organization is a business entity— (1) That operates exclusively for charitable, scientific, or educational purposes; (2) Whose earnings do not benefit any private shareholder or indivi…
  • FAR 52.227-11 Patent Rights—Ownership by the Contractor.
    …vely determined that the variety has been reproduced with recognized characteristics. Nonprofit organization means a university or other institution of higher education or an organization of the type described in section 501(c)(3) of the I…
  • FAR 15.405 Price negotiation.
    …ecome preoccupied 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'…
  • DFARS 215.404-71-3 Contract type risk and working capital adjustment.
    …nder varying contract types. The 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 approac…
  • DFARS 215.404-75 Fee requirements for FFRDCs.
    For nonprofit 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 accept…
  • FAR 15.406-1 Prenegotiation objectives.
    … officer shall document the pertinent issues to be negotiated, the cost objectives, and a profit or fee objective.
  • FAR 2.101 Definitions.
    … unique entity identifier. The suffix is assigned at the discretion of the commercial, nonprofit, or Government entity to establish additional System for Award Management records for identifying alternative EFT accounts (see subpart 32.11) …
  • FAR 27.302 Policy.
    …limitations under 35 U.S.C. 202(a)(iv) for agreements with small business concerns and nonprofit organizations are limited to inventions occurring under the above two programs; or (v) Pursuant to statute or in accordance with agency regula…
  • FAR 16.402-2 Performance incentives.
    …c elements 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 pe…
  • FAR 16.404 Fixed-price contracts with award fees.
    …t be measured objectively. Such contracts shall establish a fixed price (including normal profit) for the effort. This price will be paid for satisfactory contract performance. Award fee earned (if any) will be paid in addition to that fixe…
  • FAR 48.102 Policies.
    … on the basis 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 inst…
  • FAR 15.404-1 Proposal analysis techniques.
    …nd evaluating a proposed price without evaluating its separate cost elements and proposed profit. Unless an exception from the requirement to obtain certified cost or pricing data applies under 15.403-1(b)(1) or (b)(2), at a minimum, the co…
  • FAR 15.406-3 Documenting the negotiation.
    …ng the award 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 prici…
  • FAR 16.103 Negotiating contract type.
    …d 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 predicted with an acceptable degree of certainty. Howe…
  • FAR 16.401 General.
    …ain instances, 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 b…
  • FAR 31.001 Definitions.
    …mployer has not been terminated is an active participant of the employer's pension plan. Profit center means (except for subparts 31.3 and 31.6) the smallest organizationally independent segment of a company charged by management with prof…
  • FAR 52.244-2 Subcontracts.
    …jective 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 each inc…
  • FAR 52.248-1 Value Engineering.
    …ate to as 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) C…
  • DFARS 242.7502 Policy.
    …he cost elements 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 of…
  • DFARS 244.305-70 Policy.
    …nable areas 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 o…

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.