Clauses · FAR · Payment and financing
FAR 52.216-11 Cost Contract-No Fee
Does the regulation require it to flow down?
No
There is no mandate and there cannot be one — the words 'subcontract' and 'subcontractor' do not appear anywhere in the clause text (verified 2026-08-05). It is a prime-level pricing clause. It reaches the sub only when the prime issues a cost-type, no-fee subcontract and mirrors the fee prohibition and the reserve back-to-back, so that the prime is not paying fee downward that it cannot recover upward. Six corpus documents (BAE, L3Harris, Lockheed CORPDOC 4A, the Lockheed/ValleyTech executed subcontract, Raytheon TC002, RTX) list it in a conditional table keyed to the type of the subcontract, which is the correct handling
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 APR 1984 (Basic; Alt I APR 1984) · 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.
Nothing goes out now — paragraph (a) says no fee is paid for performing the contract, and under paragraph (b) once 80 percent of the total estimated cost in the Schedule has been paid, further payment of allowable cost may be withheld until a reserve is set aside, capped at one percent of that estimate or $100,000, whichever is less
FAR 52.216-11(a) and (b)
When it is used
FAR 16.307(e)(1): the contracting officer inserts 52.216-11 in solicitations and contracts when a cost-reimbursement contract is contemplated that provides no fee and is not a cost-sharing contract. No dollar threshold and no place-of-performance test — the trigger is purely the pricing arrangement. Alternate I (APR 1984), prescribed at 16.307(e)(2), deletes paragraph (b) — the 80 percent withholding — for a cost-reimbursement research and development contract with an educational institution or a nonprofit organization where the contracting officer determines the withholding is not required. Cost-reimbursement types are unavailable for commercial products and services (FAR 12.207(a) permits only firm-fixed-price and fixed-price with EPA, with narrow exceptions), so a commercial subcontract does not reach this clause.
Read closely
The clause has two paragraphs and neither mentions a subcontract; it prices the deal it sits in. The cash consequence is the one to plan for — the last stretch of performance may be self-funded until the reserve is released — and cost-type work also needs provisional billing rates and an annual incurred-cost submission, which do not come from this clause.
The 5 templates that name it, with the line
Source: acquisition.gov, FAR 52.216-11 and FAR 16.307(e), plus the FAR Overhaul part 16 deviation guide 16.305(e)(1) (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.