Clauses · FAR · Pricing and audit
FAR 52.216-17 Incentive Price Revision-Successive Targets
Does the regulation require it to flow down?
No
No mandate to insert the whole clause. Primes flow it down to keep the sub's price revisable on the same schedule as the prime's: if the prime must renegotiate a firm target upward or downward at the defined point in performance, a sub locked to a fixed price leaves the prime carrying the entire difference. Three corpus documents list it (BAE, L3Harris, Northrop CTM-P-ST-001), all in conditional tables keyed to subcontract type
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 JAN 2022 (Basic; Alt I APR 1984) · base v0.9.3 Read the text ↗
What it makes you produce
4 items for your checklist, slowest first.
Something you write3
Days to weeks, and nobody outside your company has to agree to it.
A proposed firm price with a detailed statement of costs incurred to date and an estimate of total cost with supporting data, within the number of days the Schedule sets after the work it identifies is complete
FAR 52.216-17(c)- FAR 52.216-17(e)
A final cost statement with completion estimates and residual inventory data for the last revision
Owed unless a firm fixed price was agreed at the first revision, which closes the second one out
A quarterly limitation on payments statement of items delivered, costs incurred, interim profit and amounts invoiced, with anything paid above what the formula supports refunded on your own initiative
FAR 52.216-17(i)
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.
The initial target prices you bill against are placeholders: the final price comes out of the paragraph (f) formula, and until it does, billing prices are adjusted under paragraph (h)
FAR 52.216-17(f) and (h)
When it is used
FAR 16.406(b): inserted in solicitations and contracts when a fixed-price incentive (successive targets) contract is contemplated — used when cost and pricing information at award is not good enough to set a realistic firm target, so the contract sets INITIAL targets plus a ceiling price and schedules a second negotiation, at a defined point in performance, to establish a firm target (or a firm fixed price), with the final price settled after that. No dollar threshold; the trigger is the pricing arrangement alone. Alternate I (APR 1984) applies when supplies or services ordered under a provisioning document or a Government option are subject to incentive price revision; it adds paragraph (q). Not available for commercial acquisitions under FAR 12.207(a) in the ordinary case.
Read closely
Two pricing events rather than one — a firm target negotiated during performance, then a final price at the end. The ceiling price is fixed from award and neither renegotiation can raise it. Failure to agree within 60 days puts the decision in the buyer's hands under paragraph (k).
The 3 templates that name it, with the line
Source: acquisition.gov, FAR 52.216-17, FAR 16.406(b), FAR 16.102(c), plus the FAR Overhaul part 16 deviation guide 16.406(b) (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.