Operating Status
FULLY OPERATIONAL
OPERATING STATUS
The FAR specifically states "A firm-fixed-price, level-of-effort term contract is suitable for investigation or study in a specific research and development area.", at FAR 16.207-2. There is a cap of $150,000 on the type of contract, at FAR 16.207-3(d). The regulation is clear, and there is no additional guidance in the DFARS. As the prime, you should inform the subcontractor of the $150,000 limit, and consult with the Contracting Officer to determine what is the proper type of contract for the requirement. Based on the proposed dollar value, FFPLOE is not acceptable.
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