Federal Acquisition Regulation
Limitations
FAR 16.206-3
This contract type shall not be used unless- (a) The contract is for research and development and the estimated cost is the simplified acquisition threshold or less; (b) The contractor’s accounting system is adequate for price redetermination; (c) There is reasonable assurance that the price redetermination will take place promptly at the specified time; and (d) The head of the contracting activity (or a higher-level official, if required by agency procedures) approves its use in writing.
GovGazette