---
kind: "section"
citation: "42 C.F.R. § 137.336"
title: "42"
number: "137.336"
heading: "What is the difference between fixed-price and cost-reimbursement agreements?"
url: "https://uscodex.org/cfr/42/137.336"
---

# §137.336. What is the difference between fixed-price and cost-reimbursement agreements?

- (a) **Cost-reimbursement agreements generally have one or more of the following characteristics—**
  - (1) Risk is shared between IHS and the Self-Governance Tribe;
  - (2) Self-Governance Tribes are not required to perform beyond the amount of funds provided under the agreement;
  - (3) Self-Governance Tribes establish budgets based upon the actual costs of the project and are not allowed to include profit;
  - (4) Budgets are stated using broad categories, such as planning, design, construction project administration, and contingency;
  - (5) The agreement funding amount is stated as a “not to exceed” amount;
  - (6) Self-Governance Tribes provide notice to the IHS if they expect to exceed the amount of the agreement and require more funds;
  - (7) Excess funds remaining at the end of the project are considered savings; and
  - (8) **Actual costs are subject to applicable OMB circulars and cost principles.**
- (b) **Fixed Price agreements generally have one or more of the following characteristics—**
  - (1) Self-Governance Tribes assume the risk for performance;
  - (2) Self-Governance Tribes are entitled to make a reasonable profit;
  - (3) Budgets may be stated as lump sums, unit cost pricing, or a combination thereof;
  - (4) For unit cost pricing, savings may occur if actual quantity is less than estimated; and,
  - (5) Excess funds remaining at the end of a lump sum fixed price project are considered profit, unless, at the option of the Self-Governance Tribe, such amounts are reclassified in whole or in part as savings.

## Notes

### Authority

Authority: 25 U.S.C. 458 et seq.

### Source

Source: 67 FR 35342, May 17, 2002, unless otherwise noted.