FAR 16.207-3
Limitations.
This contract type may be used only when- (a) The work required cannot otherwise be clearly defined; (b) The required level of effort is identified and agreed upon in advance; (c) There is reasonable assurance that the intended result cannot be achieved by expending less than the stipulated effort; and (d) The contract price is the simplified acquisition threshold or less, unless approved by the chief of the contracting office.
Source: acquisition.gov — FAR
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