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DEAR

Part Number: 915

Department of Energy Acquisition Regulation

915.404-4-70-1 General.

(a) Objective. It is the intent of DOE to remunerate contractors for financial and other risks which they may assume, resources they use, and organization, performance and management capabilities they employ. Profit or fee shall be negotiated for this purpose; however, when profit or fee is determined as a separate element of the contract price, the aim of negotiation should be to fit it to the acquisition, giving due weight to effort, risk, facilities investment, and special factors as set forth in this subpart.

(b) Commercial (profit) organization. Profit or fee prenegotiation objectives for contracts with commercial (profit) organizations shall be determined as provided in this subpart.

(c) Nonprofit organizations. It is DOE's general policy to pay fees in contracts with nonprofit organizations other than educational institutions and governmental bodies; however, it is a matter of negotiation whether a fee will be paid in a given case. In making this decision, the DOE negotiating official should consider whether the contractor is ordinarily paid fees for the type of work involved. The profit objective should be reasonable in relation to the task to be performed and the requirements placed on the contractor.

(d) Educational institutions. It is DOE policy not to pay fees under contracts with educational institutions.

(e) State, local and Indian tribal governments. Profit or fee shall not be paid under contracts with State, local, and Indian tribal Governments.