16.104  Factors in selecting contract types.

11. Amend section 16.104 by--

a. Redesignating paragraphs (e) through (k) as paragraphs (f) through (l), respectively;

b. Adding a new paragraph (e);

c. Removing from newly redesignated paragraph (f) the words "incentives to ensure" and adding the words "incentives tailored to performance outcomes to ensure" in their place;

d. Removing from newly redesignated paragraph (g) the words "price adjustment terms" and adding the words "price adjustment or price redetermination clauses" in their place; and

e. Revising newly redesignated paragraph (i).

The added and revised text reads as follows:

16.104  Factors in selecting contract types.

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(e) Combining contract types. If the entire contract cannot be firm-fixed-price, the contracting officer shall consider whether or not a portion of the contract can be established on a firm-fixed-price basis.

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(i) Adequacy of the contractor's accounting system. Before agreeing on a contract type other than firm-fixed-price, the contracting officer shall ensure that the contractor's accounting system will permit timely development of all necessary cost data in the form required by the proposed contract type. This factor may be critical--

(1) When the contract type requires price revision while performance is in progress; or

(2) When a cost-reimbursement contract is being considered and all current or past experience with the contractor has been on a fixed-price basis. See 42.302(a)(12).

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