[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: 48CFR35.006]

[Page 703]
 
            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
 
                CHAPTER 1--FEDERAL ACQUISITION REGULATION
 
PART 35_RESEARCH AND DEVELOPMENT CONTRACTING--Table of Contents
 
Sec.  35.006  Contracting methods and contract type.

    (a) In R&D acquisitions, the precise specifications necessary for 
sealed bidding are generally not available, thus making negotiation 
necessary. However, the use of negotiation in R&D contracting does not 
change the obligation to comply with part 6.
    (b) Selecting the appropriate contract type is the responsibility of 
the contracting officer. However, because of the importance of technical 
considerations in R&D, the choice of contract type should be made after 
obtaining the recommendations of technical personnel. Although the 
Government ordinarily prefers fixed-price arrangements in contracting, 
this preference applies in R&D contracting only to the extent that 
goals, objectives, specifications, and cost estimates are sufficient to 
permit such a preference. The precision with which the goals, 
performance objectives, and specifications for the work can be defined 
will largely determine the type of contract employed. The contract type 
must be selected to fit the work required.
    (c) Because the absence of precise specifications and difficulties 
in estimating costs with accuracy (resulting in a lack of confidence in 
cost estimates) normally precludes using fixed-price contracting for 
R&D, the use of cost-reimbursement contracts is usually appropriate (see 
subpart 16.3). The nature of development work often requires a cost-
reimbursement completion arrangement (see 16.306(d)). When the use of 
cost and performance incentives is desirable and practicable, fixed-
price incentive and cost-plus-incentive-fee contracts should be 
considered in that order of preference.
    (d) When levels of effort can be specified in advance, a short-
duration fixed-price contract may be useful for developing system design 
concepts, resolving potential problems, and reducing Government risks. 
Fixed-price contracting may also be used in minor projects when the 
objectives of the research are well defined and there is sufficient 
confidence in the cost estimate for price negotiations. (See 16.207.)
    (e) Projects having production requirements as a follow-on to R&D 
efforts normally should progress from cost-reimbursement contracts to 
fixed-price contracts as designs become more firmly established, risks 
are reduced, and production tooling, equipment, and processes are 
developed and proven. When possible, a final commitment to undertake 
specific product development and testing should be avoided until (1) 
preliminary exploration and studies have indicated a high degree of 
probability that development is feasible and (2) the Government has 
determined both its minimum requirements and desired objectives for 
product performance and schedule completion.

[48 FR 42352, Sept. 19, 1983, as amended at 50 FR 1744, Jan. 11, 1985; 
50 FR 52429, Dec. 23, 1985]