(a) The structured approach for determining profit or fee objectives was designed for other than nonprofit organizations. However, if modified as below, you may use it to establish fee objectives for nonprofit organizations (See FAR 31.701). Do not apply the modifications as a deduction to historical fee levels. Instead apply them as a reduction in the fee objective calculated under the structured approach.
(b) For contracts with nonprofit organizations, subtract an adjustment of up to 3 percent from the total profit-fee objective. In developing this adjustment, consider each of the following factors:
(1) Tax position benefits.
(2) Granting of financing through letters of credit.
(3) Facility requirements of the nonprofit organization.
(4) Other factors that may work to the advantage or disadvantage of the contractor as a nonprofit organization.
