Forward Pricing Rate

Forward Pricing Rates are projected indirect cost rates negotiated between the government and a contractor for use in pricing proposals during a specified period. Forward Pricing Rate Agreements (FPRAs) establish provisional billing rates and pricing rates that can be used without renegotiation for each proposal. FPRAs are based on the contractor's projected costs, historical experience, and anticipated changes in business base. Having an FPRA streamlines the proposal process since rates are pre-approved. DCAA typically audits forward pricing rate proposals. Without an FPRA, each proposal requires individual rate negotiation. Forward pricing rates are later adjusted to actual rates through the incurred cost submission process.