[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: 48CFR36.207]

[Page 715]
 
            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
 
                CHAPTER 1--FEDERAL ACQUISITION REGULATION
 
PART 36_CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS--Table of Contents
 
      Subpart 36.2_Special Aspects of Contracting for Construction
 
Sec.  36.207  Pricing fixed-price construction contracts.

    (a) Generally, firm-fixed-price contracts shall be used to acquire 
construction. They may be priced (1) on a lump-sum basis (when a lump 
sum is paid for the total work or defined parts of the work), (2) on a 
unit-price basis (when a unit price is paid for a specified quantity of 
work units), or (3) using a combination of the two methods.
    (b) Lump-sum pricing shall be used in preference to unit pricing 
except when--
    (1) Large quantities of work such as grading, paving, building 
outside utilities, or site preparation are involved;
    (2) Quantities of work, such as excavation, cannot be estimated with 
sufficient confidence to permit a lump-sum offer without a substantial 
contingency;
    (3) Estimated quantities of work required may change significantly 
during construction; or
    (4) Offerors would have to expend unusual effort to develop adequate 
estimates.
    (c) Fixed-price contracts with economic price adjustment may be used 
if such a provision is customary in contracts for the type of work being 
acquired, or when omission of an adjustment provision would preclude a 
significant number of firms from submitting offers or would result in 
offerors including unwarranted contingencies in proposed prices.