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DOD/DARC RIN: 0750-AH15 Publication ID: Spring 2011 
Title: ●Increase the Use of Fixed-Price Incentive (Firm Target) Contracts (DFARS Case 2011-D010)  
Abstract: This rule amends the Defense Federal Acquisition Regulation Supplement (DFARS) to increase the use of fixed-price incentive (firm target) contracts, with particular attention to share lines and ceiling prices. This DFARS case was initiated to incentivize productivity and innovation in industry, as set forth in a memorandum from the Under Secretary of Defense for Acquisition, Technology and Logistics, dated November 3, 2010. The memorandum provided guidance to the secretaries of the military departments and directors of defense agencies on obtaining greater efficiency and productivity in defense spending. In support of this initiative, DoD is proposing to amend DFARS subpart 216.4 to require that contracting officers must: 1. Give particular consideration to the use of fixed-price incentive (firm target) contracts, especially for acquisitions moving from development to production; and 2. Pay particular attention to share line and ceiling prices for fixed-price incentive (firm target) contracts, with 120 percent ceiling and a 50/50 share ratio as the default arrangement. This rule does not impose economic burdens on contractors. The purpose and effect of this rule is to establish an approval threshold for contract type and to encourage the use of a particular contract type in order to incentivize productivity and innovation in industry. Small entities are more likely to receive awards for commercial products, including commercially available off-the-shelf products, for which firm-fixed-price contracts are appropriate. 
Agency: Department of Defense(DOD)  Priority: Substantive, Nonsignificant 
RIN Status: First time published in the Unified Agenda Agenda Stage of Rulemaking: Final Rule Stage 
Major: No  Unfunded Mandates: No 
CFR Citation: 48 CFR 216   
Legal Authority: 410 USC 421   
Legal Deadline:  None
Timetable:
Action Date FR Cite
NPRM  03/02/2011  76 FR 11410   
NPRM Comment Period End  05/02/2011    
Final Action  08/00/2011    
Regulatory Flexibility Analysis Required: No  Government Levels Affected: Federal 
Federalism: No 
Included in the Regulatory Plan: No 
RIN Data Printed in the FR: No 
Agency Contact:
Ynette R. Shelkin
Editor, Defense Acquisition Regulations System
Department of Defense
Defense Acquisition Regulations Council
OUSD/AT&L DPAP/DARS, 3060 Defense Pentagon, Room 3B855,
Washington, DC 20301-3060
Phone:571 372-6089
Email: ynette.shelkin@osd.mil