§ 16.205-3 - Limitations.

16.205-3 Limitations.

This contract type shall not be used unless -

(a) Negotiations have established that

(1) the conditions for use of a firm-fixed-price contract are not present (see 16.202-2), and

(2) a fixed-price incentive contract would not be more appropriate;

(b) The contractor's accounting system is adequate for price redetermination;

(c) The prospective pricing periods can be made to conform with operation of the contractor's accounting system; and

(d) There is reasonable assurance that price redetermination actions will take place promptly at the specified times.