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.