[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: 48CFR16.203-2]



[Page 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. 16.203-2  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]