The corresponding FAR Part 16 and DFARS Part 216 have been overhauled under the RFO.
PGI replacement text is provided in the RFO deviation attachment.
View FAR Part 16
Current Content
The formula specified in FAR 16.403-2(a)(1)(iii) does not apply for the life of the contract. It is used to fix the firm target profit for the contract. To provide an incentive consistent with the circumstances, the formula should reflect the relative risk involved in establishing an incentive arrangement where cost and pricing information were not sufficient to permit the negotiation of firm targets at the outset.
Change History
| Detected | Type | Summary |
|---|---|---|
| detected 2026-04-17 | PGI_MODIFIED | PGI 216.403-2 updated: 1 lines added, 1 lines removed |
View diff--- previous +++ current @@ -1 +1 @@ -See PGI 216.403-2 for guidance on the use of fixed-price incentive (successive targets) contracts.+The formula specified in FAR 16.403-2(a)(1)(iii) does not apply for the life of the contract. It is used to fix the firm target profit for the contract. To provide an incentive consistent with the circumstances, the formula should reflect the relative risk involved in establishing an incentive arrangement where cost and pricing information were not sufficient to permit the negotiation of firm targets at the outset. |
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