48 C.F.R. § 16.306

16.306 Cost-plus-fixed-fee contracts.

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(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, but may be adjusted as a result of changes in the work to be performed under the contract. This contract type permits contracting for efforts that might otherwise present too great a risk to contractors, but it provides the contractor only a minimum incentive to control costs.

(b) Application. (1) A cost-plus-fixed-fee contract is suitable for use when the conditions of 16.301-2 are present and, for example—

(i) The contract is for the performance of research or preliminary exploration or study, and the level of effort required is unknown; or

(ii) The contract is for development and test, and using a cost-plus- incentive-fee contract is not practical.

(2) A cost-plus-fixed-fee contract normally should not be used in development of major systems (see part 34) once preliminary exploration, studies, and risk reduction have indicated a high degree of probability 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 with all limitations in 15.404-4(c)(4)(i) and 16.301-3.

(d) Completion and term forms. A cost-plus-fixed-fee contract may take one of two basic forms—completion or term.

(1) The completion form describes the scope of work by stating a definite goal or target and specifying an end product. This form of contract normally requires the contractor to complete and deliver the specified end product (e.g., a final report of research accomplishing the goal or target) within the estimated cost, if possible, as a condition for payment of the entire fixed fee. However, in the event the work cannot be completed within the estimated cost, the Government may require more effort without increase in fee, provided the Government increases the estimated cost.

(2) The term form describes the scope of work in general terms and obligates the contractor to devote a specified level of effort for a stated time period. Under this form, if the performance is considered satisfactory by the Government, the fixed fee is payable at the expiration of the agreed-upon period, upon contractor statement that the level of effort specified in the contract has been expended in performing the contract work. Renewal for further periods of performance is a new acquisition that involves new cost and fee arrangements.

(3) Because of the differences in obligation assumed by the contractor, the completion form is preferred over the term form whenever the work, or specific milestones for the work, can be defined well enough to permit development of estimates within which the contractor can be expected to complete the work.

(4) The term form shall not be used unless the contractor is obligated by the contract to provide a specific level of effort within a definite time period.

[48 FR 42219, Sept. 19, 1983, as amended at 50 FR 1742, Jan. 11, 1985; 50 FR 52429, Dec. 23, 1985; 60 FR 37777, July 21, 1995; 62 FR 236, Jan. 2, 1997; 63 FR 34073, June 22, 1998]

Notes of Decisions

Cited in 10 cases (2 in the last 5 years), 1995–2025 · leading case: Fluor Enter., Inc. v. United States, 64 Fed. Cl. 461 (Fed. Cl. 2005).

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Fluor Enter., Inc. v. United States, 64 Fed. Cl. 461 (Fed. Cl. 2005). · cites it 6× “48 C.F.R. § 16.306 (a). Essentially, the cost-plus-fixed-fee contract allows the contractor to be reimbursed for his allowable actual eosts and ensures that he receives a fee (the fixed-fee) in addition to those actual costs.”

Westech Int'l, Inc. v. United States, 79 Fed. Cl. 272 (Fed. Cl. 2007). “" 48 C.F.R. § 16.306 (a) (2005). A cost-plus-fixed-fee contract may take one of two forms: completion or term.”

Datamill, Inc. v. United States, 91 Fed. Cl. 740 (Fed. Cl. 2010). “” 48 C.F.R. § 16.306 (2009). Cost-plus-fixed-fee contracts "may take one of two basic forms — completion or term.”

Sys. Dynamics Int'l, Inc. v. United States, 130 Fed. Cl. 499 (Fed. Cl. 2017). “at 16; see also 48 C.F.R. 16.306(a) (“An agency shall evaluate competitive proposals and then assess their relative qualities solely on the factors and subfactors specified in the solicitation.”

Info. Sys. & Networks Corp. v. United States, 64 Fed. Cl. 599 (Fed. Cl. 2005). “See generally 48 C.F.R. § 16.306 (“Cost-plus-fixed-fee contracts”).”

Ralph L. Jones Co. v. United States, 33 Fed. Cl. 327 (Fed. Cl. 1995). “48 C.F.R. § 16.306 (a) (1994). Allison Division, General Motors Corporation, ASBCA No.”

Supplycore Inc. v. United States, 132 Fed. Cl. 480 (Fed. Cl. 2017). “” 48 C.F.R. § 16.306 (d) (2016). The argument is that disclosure of plaintiffs failure to address the Measures of Merit would have given it a chance to improve its proposal.”

SSA Marine, Inc. v. United States, 77 Fed. Cl. 662 (Fed. Cl. 2007). “48 C.F.R. § 16.306 (a) (2006). The FAR provisions provide that there are two types of CPFF contracts: term and completion.”

Dexis Interactive, Inc., etc. v. Int'l Bus. & Technical Consultants, Inc. (Va. Ct. App. 2024). · cites it 2× “” 48 C.F.R. § 16.306 (a) (emphasis added). A “completion type” or “completion form” cost-plus-fixed-fee contract “describes a typical -5- contract in which the scope of work is stated as a definite goal usually resulting in some end product.”

Peraton, Inc. (A.S.B.C.A. 2025). “” 48 C.F.R. § 16.306 (d)(2). Thus, the contractor cannot recover the total fixed fee unless it has completely performed the level of effort stated in the contract.”

— 48 C.F.R. § 16.306(a) — 1 case

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