[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: 48CFR35.006]



[Page 727]

 

            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]