16.301-3  Limitations.

FAC 2005-50 MARCH 16, 2011

(a)  A cost-reimbursement contract may be used only when--

(1)  The factors in 16.104 have been considered;

(2)  A written acquisition plan has been approved and signed at least one level above the contracting officer;

(3)  The contractor's accounting system is adequate for determining costs applicable to the contract or order; and

(4)  Prior to award of the contract or order, adequate Government resources are available to award and manage a contract other than firm-fixed-priced (see 7.104(e)). This includes appropriate Government surveillance during performance in accordance with 1.602-2, to provide reasonable assurance that efficient methods and effective cost controls are used.

(i)  Designation of at least one contracting officer's representative (COR) qualified in accordance with 1.602-2 has been made prior to award of the contract or order; and

(ii)  Appropriate Government surveillance during performance to provide reasonable assurance that efficient methods and effective cost controls are used.

(b)  The use of cost-reimbursement contracts is prohibited for the acquisition of commercial items (see Parts 2 and 12).