FAR 15.407 – Cost Rules and Procedures - Made Simple

FAR 15.407-4 is the rule that explains how to spot and stop buying too many things. It helps keep costs low and avoid waste.

Want To learn More About FAR 15.407-4?

Free Access

FAR far-15-407-4 Explained in Simple Terms

FAR 15.407-4 is about making sure your contract price is honest. It says you must tell the government if you used bad or fake cost data. If you don’t, they can lower the price later. This protects taxpayers and keeps deals fair. Think of it like showing your math on a test—if your numbers are wrong on purpose, you lose points. **Keywords:** FAR 15.407-4, defective cost or pricing data, government contracts, contract pricing, acquisition rules.

Why FAR 15.407-4 Keeps Costs Fair and Honest

FAR 15.407-4 is about fixing problems with a cost estimate before a contract is signed. It lets the government and the contractor agree on better numbers if something looks wrong or unclear. This helps make sure both sides understand the price and can move forward fairly. It’s like double-checking a receipt before paying a bill. This rule helps with fair pricing, good contract negotiation, and clear communication in government contracts.

Common Mistakes Within the Topic: far-15-407-4

A common mistake in FAR 15.407-4 is skipping the profit analysis when negotiating contracts. Many professionals don’t review if profit is fair based on risk and effort. Others forget to adjust profit when changes are made to contract terms. Ignoring this can lead to paying too much—or not enough—for the work. Always check that profit fits the job and follows rules. Doing so helps make better deals and avoids issues later.

You May Also Want to Explore:

<a href="https://learn.cradle2contract.com/made-simple/far-15-403-cost-realism-analysis">FAR 15.403 – Cost Realism Analysis</a><br>

<a href="https://learn.cradle2contract.com/made-simple/far-15-405-price-negotiation">FAR 15.405 – Price Negotiation</a><br>

<a href="https://learn.cradle2contract.com/made-simple/far-15-406-documentation-requirements">FAR 15.406 – Documentation Requirements</a><br>

<a href="https://learn.cradle2contract.com/made-simple/far-15-407-special-cost-considerations">FAR 15.407 – Special Cost Considerations</a><br>

<a href="https://learn.cradle2contract.com/made-simple/far-15-408-technical-analysis">FAR 15.408 – Technical Analysis</a><br>