# 16.202-2 Application.

A firm-fixed-price contract is suitable for acquiring commercial items (see parts 2 and 12 ) or for acquiring other supplies or services on the basis of reasonably definite functional or detailed specifications (see part 11 ) when the contracting officer can establish fair and reasonable prices at the outset, such as when-

1. (a) There is adequate price competition;

2. (b) There are reasonable price comparisons with prior purchases of the same or similar supplies or services made on a competitive basis or supported by valid certified cost or pricing data;

3. (c) Available cost or pricing information permits realistic estimates of the probable costs of performance; or

4. (d) Performance uncertainties can be identified and reasonable estimates of their cost impact can be made, and the contractor is willing to accept a firm fixed price representing assumption of the risks involved.