[Code of Federal Regulations]
[Title 48, Volume 1]
[Revised as of October 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 48CFR16.203-2]

[Page 295]
 
            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
 
                CHAPTER 1--FEDERAL ACQUISITION REGULATION
 
PART 16_TYPES OF CONTRACTS--Table of Contents
 
                   Subpart 16.2_Fixed-Price Contracts
 
Sec.  16.203-2  Application.

    A fixed-price contract with economic price adjustment may be used 
when (i) there is serious doubt concerning the stability of market or 
labor conditions that will exist during an extended period of contract 
performance, and (ii) contingencies that would otherwise be included in 
the contract price can be identified and covered separately in the 
contract. Price adjustments based on established prices should normally 
be restricted to industry-wide contingencies. Price adjustments based on 
labor and material costs should be limited to contingencies beyond the 
contractor's control. For use of economic price adjustment in sealed bid 
contracts, see 14.408-4.
    (a) In establishing the base level from which adjustment will be 
made, the contracting officer shall ensure that contingency allowances 
are not duplicated by inclusion in both the base price and the 
adjustment requested by the contractor under economic price adjustment 
clause.
    (b) In contracts that do not require submission of cost or pricing 
data, the contracting officer shall obtain adequate information to 
establish the base level from which adjustment will be made and may 
require verification of data submitted.

[48 FR 42219, Sept. 19, 1983, as amended at 50 FR 1742, Jan. 11, 1985; 
50 FR 52429, Dec. 23, 1985; 60 FR 34739, July 3, 1995]

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