Fee

Definition

Fee (or profit) on government contracts is the contractor's compensation beyond cost recovery. Determined through weighted guidelines (FAR 15.404-4) considering risk, investment, performance, and socioeconomic factors. Typical ranges: 5-10% for low-risk services, 8-15% for R&D, 10-20% for high-risk manufacturing. Fee is not allowed on cost-reimbursement contracts without explicit authorization.

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