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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.