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  • Question

    Here is a perplexing question for you to start your week, and I wonder if someone can assist me in answering it, please. The sub ktr is proposing royalties. The contract is a FFP. 1) does the FAR allow royalty amounts to get fees/profits applied? I'm all over 27.202 and 15.404, but I'm just not seeing it. I have not come across this situation previously, so I'm asking for an assist.


    Answer

    You would need to look in FAR part 31, specifically FAR 31.205-37. That section states that royalties are an allowable cost (with certain exceptions). If they are an allowable cost, then profit should be applicable unless specifically prohibited. I’m unaware of any such prohibition. 

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