FAR 15.400—Scope of subpart.
Plain-English Summary
FAR 15.400 is a scope statement that tells readers what Subpart 15.4 covers: the cost and price negotiation policies and procedures used to price negotiated prime contracts, subcontracts, and contract modifications. It also makes clear that these pricing rules apply not only to new negotiated awards, but also to modifications of existing contracts, including modifications to contracts originally awarded by sealed bidding. In practice, this section is important because it defines the boundary of the pricing rules that contracting officers and contractors must follow when establishing or revising contract prices. It signals that the subpart is about negotiation-based pricing methods and procedures, not sealed-bid award procedures themselves, while still reaching later modifications to sealed-bid contracts. For acquisition professionals, the section is a roadmap: if the action involves negotiated pricing or a price change through modification, this subpart is the governing framework for how the price is developed and negotiated.
Key Rules
Covers negotiated pricing
The subpart applies to cost and price negotiation policies and procedures. That means it governs how prices are developed and negotiated when the Government is not using sealed bidding to set the price.
Applies to prime contracts
The rules cover pricing of negotiated prime contracts. Contracting officers must use the subpart when establishing the price of a prime contract through negotiation.
Includes subcontracts
The scope expressly includes subcontracts. This means the pricing principles in the subpart are relevant not only at the prime level but also when negotiated subcontract pricing is being established.
Covers contract modifications
The subpart also applies to contract modifications. Any negotiated change to contract terms that affects price falls within the pricing policies and procedures addressed here.
Reaches sealed-bid modifications
Even if the original contract was awarded by sealed bidding, later modifications are included. The pricing rules in this subpart still apply when the parties negotiate a modification to that contract.
Responsibilities
Contracting Officer
Apply the cost and price negotiation policies and procedures in this subpart when pricing negotiated prime contracts, subcontracts within the scope of the action, and any contract modification that requires negotiated pricing, including modifications to sealed-bid contracts.
Contractor
Use the subpart as the framework for preparing, supporting, and negotiating proposed prices for covered contract actions, including modifications and subcontract pricing where applicable.
Subcontractor
Provide pricing information and support for negotiated subcontract actions that fall within the scope of this subpart, as required by the prime contractor or contracting structure.
Agency
Ensure acquisition personnel follow the correct pricing policies and procedures for negotiated actions and modifications, and distinguish these actions from sealed-bid award procedures.
Practical Implications
This section is a scope gatekeeper: before applying Subpart 15.4, confirm the action is a negotiated pricing action or a modification that changes price.
A common pitfall is assuming sealed-bid contracts are outside these rules entirely; the original award may be sealed bid, but negotiated modifications are still covered.
Contractors should expect price support and negotiation requirements whenever a modification is priced under this subpart, even if the base contract was competed differently.
Contracting officers should use this section to determine whether the pricing framework in Subpart 15.4 applies, especially when dealing with mixed acquisition histories or post-award changes.
Because the section is broad, it helps prevent using the wrong pricing procedures for subcontracts or modifications, which can lead to unsupported prices or avoidable disputes.
Official Regulatory Text
This subpart prescribes the cost and price negotiation policies and procedures for pricing negotiated prime contracts (including subcontracts) and contract modifications, including modifications to contracts awarded by sealed bidding.