48 CFR 1516.303-76
1516.303-76 Fee on cost-sharing contracts by subcontractors.
United States · 48 CFR — Federal Acquisition Regulations System · Status: effective
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- Citation
- 48 CFR 1516.303-76, 1516.303-76 Fee on cost-sharing contracts by subcontractors, United States, version 1 as recorded 2026-07-09, yourstate.us, https://yourstate.us/provision/250458
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Full text
(a) Subcontractors under prime cost-sharing contracts who do not have a significant direct interest in the contract or who are not in a position to gain long-term benefits from the contract may earn a fee.
(b) Contracting Officers should be alert to a potential vulnerability for the Government under cost-sharing contracts when evaluating proposed subcontractors or consenting to a subcontract during contract administration, where the subcontractor is a wholly-owned subsidiary of the prime. The vulnerability consists of the subsidiary earning a large amount of fee, which could be returned to the prime through stock dividends or other intercompany transactions. This could circumvent the objective of a cost-sharing contract.
Legislative history
This is a federal regulation, adopted through agency rulemaking under the Administrative Procedure Act — not enacted by a recorded vote of Congress.