US Code

Public Law 119-73 (01/23/2026)

10 U.S.C. § 3374

Undefinitized contractual actions: allowable profit

(a)

Allowed Profit to Reflect Cost Risks of Contractor .—

The head of an agency shall ensure that the profit allowed on an undefinitized contractual action for which the final price is negotiated after a substantial portion of the performance required is completed reflects—
(1)
the possible reduced cost risk of the contractor with respect to costs incurred during performance of the contract before the final price is negotiated;
(2)
the reduced cost risk of the contractor with respect to costs incurred during performance of the remaining portion of the contract;
(3)
the increased cost risk of the contractor with respect to any costs incurred prior to the award of the undefinitized contractual action when such costs—
(A)
would have been directly chargeable to the contract if incurred after the award of the contract; and
(B)
section 4211 of this title were incurred to meet an anticipated contract delivery schedule or anticipated contract price targets of the Government under an acquisition strategy required under ; and
(4)
the increased cost risk of the contractor with respect to negotiations continuing for more than 180 days beginning on the date on which the contractor submitted the qualifying proposal to definitize such undefinitized contractual action.
(b)

Date as of Which Contractor Cost Risk to Be Determined .—

If a contractor submits a qualifying proposal to definitize an undefinitized contractual action and the contracting officer for such action definitizes the contract after the end of the 180-day period beginning on the date on which the contractor submitted the qualifying proposal, the head of the agency concerned shall ensure that the profit allowed on the contract accurately reflects the cost risk of the contractor as such risk existed on the date the contractor submitted the qualifying proposal.

Pub. L. 116–283, div. A, title XVIII, § 1819(a)134 Stat. 4189Pub. L. 119–60, div. A, title VIII, § 814(a)139 Stat. 953(Added and amended , (e), , , 4190; , , .)

Editorial Notes

Codification

section 2326 of this titlePub. L. 116–283, § 1819(e)Pub. L. 99–500, § 101(c) [title X, § 908(d)(1)(A)]100 Stat. 1783–82Pub. L. 99–591, § 101(c) [title X, § 908(d)(1)(A)]100 Stat. 3341–82Pub. L. 99–661, div. A, title IX100 Stat. 3921Pub. L. 100–26, § 3(5)101 Stat. 273Pub. L. 114–328, div. A, title VIII, § 811(1)130 Stat. 2268Pub. L. 115–91, div. A, title VIII, § 815(a)(1)131 Stat. 1462Pub. L. 99–500Pub. L. 99–591Pub. L. 99–661The text of subsec. (f) of , which was transferred to this section and amended by , was based on , , , 1783–141, and , , , 3341–141; , formerly title IV, § 908(d)(1)(A), , , renumbered title IX, , , ; , , ; , , . , , and added identical subsections.

Amendments

Pub. L. 119–60, § 814(a)(1)2025—Subsec. (a). , struck out “Certain Reduced” before “Cost Risks” in heading.

Pub. L. 119–60, § 814(a)(2)Subsec. (a)(3), (4). –(4), added pars. (3) and (4).

Pub. L. 116–283, § 1819(e)(1)(A)section 2326 of this title2021—, transferred subsec. (f) of to this section and struck out subsec. (f) designation and heading “Allowable Profit” at beginning.

Pub. L. 116–283, § 1819(e)(1)(B)section 2326(f) of this titleSubsec. (a). , (2), redesignated par. (1) of former as subsec. (a) of this section, inserted heading, and redesignated subpars. (A) and (B) as pars. (1) and (2), respectively.

Pub. L. 116–283, § 1819(e)(1)(B)section 2326(f) of this titleSubsec. (b). , (3), redesignated par. (2) of former as subsec. (b) of this section and inserted heading.

Statutory Notes and Related Subsidiaries

Effective Date

Pub. L. 116–283section 1801(d) of Pub. L. 116–283section 3001 of this titleSection and amendment by effective , with additional provisions for delayed implementation and applicability of existing law, see , set out as an Effective Date of 2021 Amendment note preceding .

Regulations

Pub. L. 119–60, div. A, title VIII, § 814(b)139 Stat. 953

section 3374(a) of title 10“Not later than 120 days after the date of the enactment of this Act [], the Secretary of Defense shall revise the Department of Defense Supplement to the Federal Acquisition Regulation to carry out , United States Code, as amended by subsection (a).”
, , , provided that: