FAR 16.301-3

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

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