[Code of Federal Regulations]

[Title 48, Volume 1]

[Revised as of October 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 48CFR16.203-1]



[Page 305-306]

 

            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. 16.203-1  Description.



    (a) A fixed-price contract with economic price adjustment provides 

for upward and downward revision of the stated contract price upon the 

occurrence of specified contingencies. Economic price adjustments are of 

three general types:

    (1) Adjustments based on established prices. These price adjustments 

are based on increases or decreases from an agreed-upon level in 

published or otherwise established prices of specific items or the 

contract end items.

    (2) Adjustments based on actual costs of labor or material. These 

price adjustments are based on increases or decreases in specified costs 

of labor or material that the contractor actually experiences during 

contract performance.

    (3) Adjustments based on cost indexes of labor or material. These 

price adjustments are based on increases or decreases in labor or 

material cost standards or indexes that are specifically identified in 

the contract.

    (b) The contracting officer may use a fixed-price contract with 

economic price adjustment in conjunction with an award-fee incentive 

(see 16.404) and performance or delivery incentives (see 16.402-2 and 

16.402-3) when the award



[[Page 306]]



fee or incentive is based solely on factors other than cost. The 

contract type remains fixed-price with economic price adjustment when 

used with these incentives.



[48 FR 42219, Sept. 19, 1983, as amended at 68 FR 13201, Mar. 18, 2003]