16.307
Contract clauses
FAR 16.307 mandates the inclusion of specific cost-reimbursement contract clauses and their alternates based on contract type and contractor classification, ensuring proper cost, payment, and fee arrangements.
Overview
FAR 16.307 specifies the mandatory contract clauses that must be included in solicitations and contracts for various types of cost-reimbursement and time-and-materials contracts. It details which FAR 52.216 clauses (and their alternates) are required based on contract type (e.g., cost-plus-fixed-fee, cost-sharing, construction, research and development), the nature of the contractor (e.g., educational institution, nonprofit, state/local government), and whether predetermined indirect cost rates are used. The section ensures that the appropriate cost principles, payment, and fee structures are contractually established to align with federal requirements.
Key Rules
- Allowable Cost and Payment (52.216-7)
- Required for cost-reimbursement and certain time-and-materials contracts, with specific alternates for construction, educational institutions, state/local governments, and certain nonprofits.
- Fixed Fee Clauses (52.216-8, 52.216-9, 52.216-10)
- Use the appropriate clause for cost-plus-fixed-fee (general, construction, or incentive fee) contracts.
- No Fee and Cost-Sharing Clauses (52.216-11, 52.216-12)
- Insert these clauses for contracts with no fee or cost-sharing arrangements, with alternates for educational and nonprofit organizations if withholding is not required.
- Predetermined Indirect Cost Rates (52.216-15)
- Required for cost-reimbursement R&D contracts with educational institutions using predetermined indirect cost rates.
Responsibilities
- Contracting Officers: Must select and insert the correct FAR clauses and alternates based on contract type and contractor classification.
- Contractors: Must comply with the terms and requirements of the inserted clauses, including cost allowability, payment procedures, and indirect cost rate application.
- Agencies: Ensure oversight and compliance with clause inclusion and contract administration.
Practical Implications
- This section ensures contracts are structured to protect government interests and clarify payment, cost, and fee arrangements.
- Failure to include the correct clauses can result in payment disputes, audit findings, or noncompliance.
- Contractors should review solicitations to confirm the correct clauses are present and understand their obligations under each clause.