---
kind: "section"
citation: "48 C.F.R. § 16.205-3"
title: "48"
number: "16.205-3"
heading: "Limitations."
url: "https://uscodex.org/cfr/48/16.205-3"
---

# §16.205-3. Limitations.


This contract type shall not be used unless—

- (a) Negotiations have established that (1) the conditions for use of a firm-fixed-price contract are not present (see 16.202-2), and (2) a fixed-price incentive contract would not be more appropriate;
- (b) The contractor's accounting system is adequate for price redetermination;
- (c) The prospective pricing periods can be made to conform with operation of the contractor's accounting system; and
- (d) There is reasonable assurance that price redetermination actions will take place promptly at the specified times.

## Notes

### Authority

Authority: 41 U.S.C. 1121(b); 40 U.S.C. 121(c); 10 U.S.C. chapter 4 and 10 U.S.C. chapter 137 legacy provisions (see 10 U.S.C. 3016); and 51 U.S.C. 20113.

### Source

Source: 48 FR 42219, Sept. 19, 1983, unless otherwise noted.