DFARS 217.7404-6 Allowable profit

Subsection Defense Federal Acquisition Regulation Supplement

Facts

Citation
DFARS 217.7404-6
Type
Subsection
Supplements
FAR Part 17 Special Contracting Methods
Last amended
84 FR 39204 Effective Aug 9, 2019
Text as of
DFARS Change May 7, 2026
Official text
acquisition.gov

Text from acquisition.gov. Federal Register history from the Federal Register's records of the rules that amended this subsection.

Text

When the final price of a UCA is negotiated after a substantial portion of the required performance has been completed, the head of the contracting activity shall ensure the profit allowed reflects—

(a) Any reduced cost risk to the contractor for costs incurred during contract performance before negotiation of the final price. However, if a contractor submits a qualifying proposal to definitize a UCA, and the contracting officer for such action definitizes the contract after the end of the 180-day period beginning on the date on which the contractor submitted the qualifying proposal, the profit allowed on the contract shall accurately reflect the cost risk of the contractor as such risk existed on the date the contractor submitted the qualifying proposal;

(b) Any reduced cost risk to the contractor for costs expected to be incurred during performance of the remainder of the contract after negotiation of the final price; and

(c) The requirements at 215.404-71 -3(d)(2). The risk assessment shall be documented in the price negotiation memorandum.

Federal Register history

Sections cited

Quick answers

What is DFARS 217.7404-6?

DFARS 217.7404-6 is a subsection of the Defense Federal Acquisition Regulation Supplement, titled "Allowable profit".

When was DFARS 217.7404-6 last changed?

The most recent final rule on record is "Defense Federal Acquisition Regulation Supplement: Undefinitized Contract Actions (DFARS Case 2018-D008)" (84 FR 39204), published Aug 9, 2019 and effective Aug 9, 2019.

Are changes to DFARS 217.7404-6 proposed?

No proposed rule from the last 3 years is waiting on a final rule.

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