FAR 34.005-5—Full-scale development contracts.
Plain-English Summary
FAR 34.005-5 addresses how full-scale development contracts should be structured when an agency is moving from development into a possible production decision. The section focuses on one practical topic: whether, and how, the contract should require contractors to submit priced production proposals during development. It says that, whenever practicable, those proposals should be based on the latest quantity, schedule, logistics requirements, and other factors that will be used to decide whether to buy production. In practice, this helps the Government compare realistic production pricing before committing to a production buy, and it helps avoid relying on outdated assumptions from earlier development stages. The rule is aimed at improving the quality of the production decision, reducing rework, and making sure the eventual production proposal reflects current program needs rather than stale estimates. It is a planning and solicitation/contract-structure requirement, not a mandatory requirement in every case, because it applies only when practicable.
Key Rules
Include production pricing when practicable
Full-scale development contracts should, whenever practicable, require contractors to submit priced proposals for production. The intent is to have pricing information available before the Government makes a production decision.
Use current production inputs
The priced proposals should be based on the latest quantity, schedule, and logistics requirements. They should also reflect any other considerations that will be used in deciding whether to proceed with production.
Tie proposals to the production decision
The proposal should be designed to support the actual production decision, not an earlier or hypothetical version of the program. This ensures the Government evaluates production pricing using the same assumptions it will rely on when awarding or approving production.
Responsibilities
Contracting Officer
Structure the full-scale development contract to require priced production proposals whenever practicable, and ensure the proposal instructions reflect the latest quantity, schedule, logistics, and other decision factors.
Agency/Program Office
Provide current production requirements and decision criteria so the production proposal request reflects the most up-to-date program needs and supports the production decision.
Contractor
Prepare and submit priced production proposals using the latest Government-provided requirements and any other stated considerations that will be used in the production decision.
Practical Implications
This section helps the Government avoid negotiating production prices based on outdated development assumptions, which can lead to unrealistic pricing or later rework.
Contracting officers should make sure the production proposal request is updated as the program evolves; stale quantity or schedule data can undermine the value of the proposal.
Contractors should watch for changes in quantities, delivery schedules, or logistics requirements during development and ensure their pricing reflects the current version of the requirement.
The phrase "whenever practicable" gives some flexibility, but agencies should be prepared to explain why a priced production proposal was not included if it was omitted.
A common pitfall is treating the development contract as if production pricing can wait until later without any advance planning; this section encourages early, decision-ready pricing information.
Official Regulatory Text
Whenever practicable, the full-scale development contracts should provide for the contractors to submit priced proposals for production that are based on the latest quantity, schedule, and logistics requirements and other considerations that will be used in making the production decision.