FAR 52.216-7, Allowable Cost and Payment (Part 1 of 2)

Applicability: This FAR clause is incorporated in cost reimbursement contracts and Time-and-Materials (T&M) contracts for other than commercial items.  For T&M contracts, the clause only applies to the part of the contract that reimburses materials on the basis of actual cost.  The clause also includes four alternate versions, which are included in contracts as follows (the alternate versions generally provide additional wording regarding the frequency of payments): Alternate I is included in Construction Contracts that also include the clause at FAR 52.237-27, Prompt Payment for Construction Contracts; Alternate II is included if the contract is with an educational institution; Alternate III is included if the contract is with a State or local government; and Alternate IV is included if the contract is with (a) a … Continue reading