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  • Question

    We'd like to use a COST CLIN for the portion that cannot be reasonably defined. We've found the below citations showing we cannot have a cost type 'contract,' but we have not found a prohibition on just a cost 'CLIN' when the overall contract type is Firm Fixed Price. Is it permissible to use a COST CLIN in this situation? FAR 16.301-3: Limitations (a) A cost reimbursement contract may be used only when -- (3) The contractor's accounting system is adequate for determining costs applicable to the contract; FAR 16.301-3: Limitations (b) The use of cost reimbursement contracts is prohibited for the acquisition of commercial items (see Parts 2 and 12).


    Answer

    Based on your question it appears this contract is for commercial items, including the part of the effort that you are asking about regarding the source(s) not having an approved contracting system. The answer is "no," but for a different reason than the absence of an approved accounting system. You cannot use a cost reimbursement CLIN for a commercial item under any circumstances. However, you CAN use a time-and-materials contract type for the CLIN in question if the requirements of FAR 12.207(b)(1) are met.

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