FAR 16.205-2 Application
Subsection Federal Acquisition Regulation
Facts
- Citation
- FAR 16.205-2
- Type
- Subsection
- Proposed changes
- 1
- Text as of
- FAC 2026-01
- 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
A fixed-price contract with prospective price redetermination may be used in acquisitions of quantity production or services for which it is possible to negotiate a fair and reasonable firm fixed price for an initial period, but not for subsequent periods of contract performance.
(a) The initial period should be the longest period for which it is possible to negotiate a fair and reasonable firm fixed price. Each subsequent pricing period should be at least 12 months.
(b) The contract may provide for a ceiling price based on evaluation of the uncertainties involved in performance and their possible cost impact. This ceiling price should provide for assumption of a reasonable proportion of the risk by the contractor and, once established, may be adjusted only by operation of contract clauses providing for equitable adjustment or other revision of the contract price under stated circumstances.
Proposed changes
| Proposed rule | Published | Comments |
|---|---|---|
| Federal Acquisition Regulation: Revolutionary Federal Acquisition Regulation Overhaul Parts 16, 17, and 35 | Closed Oct 19, 2026No final rule found |
Quick answers
What is FAR 16.205-2?
FAR 16.205-2 is a subsection of the Federal Acquisition Regulation, titled "Application".
Are changes to FAR 16.205-2 proposed?
One proposed change has no final rule yet.
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