16.307 Contract clauses
Source: FAR 16.307 on acquisition.gov
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.
(a)
(1) The contracting officer shall insert the clause at 52.216-7, Allowable Cost and Payment, in solicitations and contracts when a cost-reimbursement contract or a time-and-materials contract (other than a contract for a commercial product or commercial service) is contemplated. If the contract is a time-and-materials contract, the clause at 52.216-7 applies in conjunction with the clause at 52.232-7), but only to the portion of the contract that provides for reimbursement of materials (as defined in the clause at 52.232-7) at actual cost. Further, the clause at 52.216-7 does not apply to labor-hour contracts.
(2) If the contract is a construction contract and contains the clause at 52.232-27, Prompt Payment for Construction Contracts, the contracting officer shall use the clause at 52.216-7 with its Alternate I.
(3) If the contract is with an educational institution, the contracting officer shall use the clause at 52.216-7 with its Alternate II.
(4) If the contract is with a State or local government, the contracting officer shall use the clause at 52.216-7 with its Alternate III.
(5) If the contract is with a nonprofit organization other than an educational institution, a State or local government, or a nonprofit organization exempted under the OMB Uniform Guidance at 2 CFR part 200, appendix VIII, the contracting officer shall use the clause at 52.216-7 with its Alternate IV.
(b) The contracting officer shall insert the clause at 52.216-8, Fixed Fee, in solicitations and contracts when a cost-plus-fixed-fee contract (other than a construction contract) is contemplated.
(c) The contracting officer shall insert the clause at 52.216-9, Fixed-Fee-Construction, in solicitations and contracts when a cost-plus-fixed-fee construction contract is contemplated.
(d) The contracting officer shall insert the clause at 52.216-10, Incentive Fee, in solicitations and contracts when a cost-plus-incentive-fee contract is contemplated.
(e)
(1) The contracting officer shall insert the clause at 52.216-11, Cost Contract-No Fee, in solicitations and contracts when a cost-reimbursement contract is contemplated that provides no fee and is not a cost-sharing contract.
(2) If a cost-reimbursement research and development contract with an educational institution or a nonprofit organization that provides no fee or other payment above cost and is not a cost-sharing contract is contemplated, and if the contracting officer determines that withholding of a portion of allowable costs is not required, the contracting officer shall use the clause with its Alternate I.
(f)
(1) The contracting officer shall insert the clause at 52.216-12, Cost-Sharing Contract-No Fee, in solicitations and contracts when a cost-sharing contract is contemplated.
(2) If a cost-sharing research and development contract with an educational institution or a nonprofit organization is contemplated, and if the contracting officer determines that withholding of a portion of allowable costs is not required, the contracting officer shall use the clause with its Alternate I.
(g) The contracting officer shall insert the clause at 52.216-15, Predetermined Indirect Cost Rates, in solicitations and contracts when a cost-reimbursement research and development contract with an educational institution (see 42.705-3(b)) is contemplated and predetermined indirect cost rates are to be used.