# 16.206-3 Limitations.

This contract type shall not be used unless-

1. (a) The contract is for research and development and the estimated cost is $150,000 or less;

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

3. (c) There is reasonable assurance that the price redetermination will take place promptly at the specified time; and

4. (d) The head of the contracting activity (or a higher-level official, if required by agency procedures) approves its use in writing.