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FAR and DFARS › FAR Part 16: Types of Contracts › Subpart 16.3

FAR 16.301-2 Application.

The codified text (eCFR, as of 2026-10-02). Under the Revolutionary FAR Overhaul ↗, agencies follow class deviations with new text for many parts while the formal rules go through the Federal Register: check the solicitation and your contract's clauses, which rule.

In plain English

This section tells contracting officers when they can use cost-reimbursement contracts. They can only do so if the agency cannot clearly define its requirements for a fixed-price contract or if uncertainties make costs too hard to estimate for any fixed-price contract. The contracting officer must also document the reason for choosing this contract type in the acquisition plan and get it approved at least one level above them.

Applies to: Contracting officers

What it requires

  • Use cost-reimbursement contracts only when circumstances do not allow defining requirements for a fixed-price contract or uncertainties prevent estimating costs accurately for any fixed-price contract.
  • Document the rationale for selecting the contract type in the written acquisition plan.
  • Ensure the acquisition plan is approved and signed at least one level above the contracting officer.

Key terms: cost-reimbursement contracts · fixed-price contract · contracting officer · acquisition plan

Written by AI from this section's text. A guide, not legal advice: the text below rules.

The text

(a) The contracting officer shall use cost-reimbursement contracts only when—

(1) Circumstances do not allow the agency to define its requirements sufficiently to allow for a fixed-price type contract (see 7.105); or

(2) Uncertainties involved in contract performance do not permit costs to be estimated with sufficient accuracy to use any type of fixed-price contract.

(b) The contracting officer shall document the rationale for selecting the contract type in the written acquisition plan and ensure that the plan is approved and signed at least one level above the contracting officer (see 7.103(j) and 7.105). See also 16.103(d).

Sections it refers to

  • 7.105 Contents of written acquisition plans.
  • 7.103 Agency-head responsibilities.
  • 16.103 Negotiating contract type.

Sections that refer to it

  • 16.306 Cost-plus-fixed-fee contracts.
  • 16.405-1 Cost-plus-incentive-fee contracts.

← 16.301-1 Description. · 16.301-3 Limitations. →

Rule changes for FAR Part 16

Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.

FAR 16.301-2 Application · SpendQuery