Clauses · FAR · Pricing and audit · provision
FAR 52.215-16 Facilities Capital Cost of Money
Does the regulation require it to flow down?
No
No mandate of any kind — 15.408(h) directs it at the Government's own solicitations and the text contains no subcontracts paragraph. It reaches subs purely by template mirroring: 7 of 43 corpus documents (AAR, BAE, Lockheed CORPDOC 3A and 4A, the Lockheed/ValleyTech executed subcontract, Raytheon TC002, RTX) copy the Section I / Section K list of the prime contract wholesale and carry the provision into the flow-down table. A solicitation-stage provision sitting inside an executed purchase order is a template defect, not an obligation
A clause can reach your subcontract without a mandate. Once it is in your document, it is a contract term all the same. The missing mandate is a fact about the regulation. It is not a ruling on your order.
Checked against acquisition.gov on 2026-08-05 · edition JUN 2003 · base v0.9.3 Read the text ↗
What it makes you produce
One item for your checklist.
Nothing to send now
It does not hold the order. It decides what money moves later — what you can claim, what can be claimed from you, and what can be held back — and none of that changes after signature.
Facilities capital cost of money — the imputed cost of capital tied up in the plant and equipment used on the job — computed under 48 CFR 9904.414, or 9904.417 for assets under construction, and named as its own proposed cost, since FAR 31.205-10(b) allows it on no other basis
FAR 52.215-16(a) and (b)
When it is used
A SOLICITATION PROVISION, not a clause. FAR 15.408(h): the contracting officer inserts 52.215-16 in solicitations expected to result in contracts that are subject to the cost principles for contracts with commercial organizations (FAR subpart 31.2) — i.e. cost-reimbursement work and fixed-price work priced on the basis of cost analysis. No dollar threshold, no alternates. It does not reach a firm-fixed-price commercial acquisition, which is priced under FAR part 12 and 52.212-4 rather than subpart 31.2. Its whole operative content is a warning: FAR 31.205-10(b)(3) makes facilities capital cost of money allowable only if it is specifically identified and proposed in the cost proposal, and if the offeror does not propose it the resulting contract gets 52.215-17, Waiver of Facilities Capital Cost of Money, instead.
Read closely
The whole of it runs at proposal time and there is nothing to do after award. Silence puts FAR 52.215-17 into the contract, and the cost is unrecoverable there for the life of it. Inside a purchase order already signed, the live question is whether the accepted price carried this cost or whether FAR 52.215-17 came in the same package.
The 6 templates that name it, with the line
Source: acquisition.gov, FAR 52.215-16, FAR 15.408(h), FAR 31.205-10(b), and the FAR Overhaul part 15 deviation guide 15.110(p) (verified 2026-08-05)
This is research, not legal advice. It states what the regulation says about this clause and cites the paragraph behind it. It does not rule on your order, and it does not rule on whether a prime's markings are correct.