e-CFR Navigation Aids


Simple Search

Advanced Search

 — Boolean

 — Proximity


Search History

Search Tips


Latest Updates

User Info


Agency List

Incorporation By Reference

eCFR logo

Related Resources

Electronic Code of Federal Regulations

We invite you to try out our new beta eCFR site at https://ecfr.federalregister.gov. We have made big changes to make the eCFR easier to use. Be sure to leave feedback using the Feedback button on the bottom right of each page!

e-CFR data is current as of March 5, 2021

Title 48Chapter 1Subchapter CPart 16Subpart 16.2 → §16.206-2

Title 48: Federal Acquisition Regulations System
Subpart 16.2—Fixed-Price Contracts

16.206-2   Application.

A fixed-ceiling-price contract with retroactive price redetermination is appropriate for research and development contracts estimated at the simplified acquisition threshold or less when it is established at the outset that a fair and reasonable firm fixed price cannot be negotiated and that the amount involved and short performance period make the use of any other fixed-price contract type impracticable.

(a) A ceiling price shall be negotiated for the contract at a level that reflects a reasonable sharing of risk by the contractor. The established ceiling price may be adjusted only if required by the operation of contract clauses providing for equitable adjustment or other revision of the contract price under stated circumstances.

(b) The contract should be awarded only after negotiation of a billing price that is as fair and reasonable as the circumstances permit.

(c) Since this contract type provides the contractor no cost control incentive except the ceiling price, the contracting officer should make clear to the contractor during discussion before award that the contractor's management effectiveness and ingenuity will be considered in retroactively redetermining the price.

[48 FR 42219, Sept. 19, 1983, as amended at 75 FR 53133, Aug. 30, 2010; 85 FR 40067, July 2, 2020]

Need assistance?