48 CFR §16.301-3

1. (a)A cost-reimbursement contract may be used only when—
   1. (1)The factors in 16.104 have been considered;
   2. (2)A written acquisition plan has been approved and signed at least one level above the contracting officer;
   3. (3)The contractor's accounting system is adequate for determining costs applicable to the contract or order; and
   4. (4)Prior to award of the contract or order, adequate Government resources are available to award and manage a contract other than firm-fixed-priced (see 7.104(e)). This includes appropriate Government surveillance during performance in accordance with 1.602-2, to provide reasonable assurance that efficient methods and effective cost controls are used.
2. (b)The use of cost-reimbursement contracts is prohibited for the acquisition of commercial products and commercial services (see parts 2 and 12).