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   <concept id="DFARS_235.006"
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      <title class="- topic/title " outputclass=" Subpart">
         <ph props="autonumber" class="- topic/ph ">235.006</ph> Contracting methods and contract type.</title>
      <conbody class="- topic/body  concept/conbody ">
         <p outputclass="List1" class="- topic/p ">(b)(i)   Consistent with section 829 of the National Defense Authorization Act for Fiscal Year 2017 (Pub. L. 114-328), the Under Secretary of Defense for Acquisition and Sustainment (USD(A&amp;S)) has determined that the use of cost-reimbursement contracts for research and development in excess of $25 million is approved, if the contracting officer executes a written determination and findings that—</p>
         <p outputclass="List4" class="- topic/p ">(A)  The level of program risk does not permit realistic pricing; and</p>
         <p outputclass="List4" class="- topic/p ">(B)  It is not possible to provide an equitable and sensible allocation of program risk between the Government and the contractor. </p>
         <p outputclass="List3" class="- topic/p ">(ii)  For major defense acquisition programs as defined in 10 U.S.C. 2430—</p>
         <p outputclass="List4" class="- topic/p ">(A)  Follow the procedures at 
               <xref outputclass="fm:ParaNumOnly"
                  class="- topic/xref "
                  base="DFARS-234.004"
                  href="234.004.dita#DFARS_234.004">234.004</xref>
            ; and</p>
         <p outputclass="List2" class="- topic/p ">(B)  Notify the milestone decision authority of an intent not to exercise a fixed-price production option on a development contract for a major weapon system reasonably in advance of the expiration of the option exercise period.</p>
         <p outputclass="List3" class="- topic/p ">(iii)  For other than major defense acquisition programs—</p>
         <p outputclass="List4" class="- topic/p ">(A)  Do not award a fixed-price type contract for a development program effort unless—</p>
         <p outputclass="List6" class="- topic/p ">(<i class="+ topic/ph hi-d/i ">1</i>)  The level of program risk permits realistic pricing;</p>
         <p outputclass="List6" class="- topic/p ">(<i class="+ topic/ph hi-d/i ">2</i>)  The use of a fixed-price type contract permits an equitable and sensible allocation of program risk between the Government and the contractor; and</p>
         <p outputclass="List6" class="- topic/p ">(3)  A written determination that the criteria of paragraphs (b)(iii)(A)(1) and (2) of this section have been met is executed—</p>
         <p outputclass="List7" class="- topic/p ">(i)  By the USD(A&amp;S) if the contract is over $25 million and is for: research and development for a non-major system; the development of a major system (as defined in FAR 2.101); or the development of a subsystem of a major system; or</p>
         <p outputclass="List7" class="- topic/p ">(ii)  By the contracting officer for any development not covered by paragraph (b)(iii)(A)(3)(i) of this section.</p>
         <p outputclass="List4" class="- topic/p ">(B)  Obtain USD(A&amp;S) approval of the Government’s prenegotiation position before negotiations begin, and obtain USD(A&amp;S) approval of the negotiated agreement with the contractor before the agreement is executed, for any action that is—</p>
         <p outputclass="List6" class="- topic/p ">(<i class="+ topic/ph hi-d/i ">1</i>)  An increase of more than $250 million in the price or ceiling price of a fixed-price type development contract, or a fixed-price type contract for the lead ship of a class;</p>
         <p outputclass="List6" class="- topic/p ">(<i class="+ topic/ph hi-d/i ">2</i>)  A reduction in the amount of work under a fixed-price type development contract or a fixed-price type contract for the lead ship of a class, when the value of the work deleted is $100 million or more; or</p>
         <p outputclass="List6" class="- topic/p ">(<i class="+ topic/ph hi-d/i ">3</i>)  A repricing of fixed-price type production options to a development contract, or a contract for the lead ship of a class, that increases the price or ceiling price by more than $250 million for equivalent quantities.</p>
      </conbody>
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