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16.205-3 Limitations.

16.205-3 Limitations.

This contract type shall not be used unless-

  1. (a) Negotiations have established that-

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

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

  2. (b) The contractor’s accounting system is adequate for price redetermination;

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

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