36.215
Special procedure for cost-reimbursement contracts for construction
Cost-reimbursement contracts for construction are only allowed when justified under FAR 16.3 and 15, and must comply with specific fee limitations.
Overview
FAR 36.215 outlines the special procedures for using cost-reimbursement contracts in construction projects. It states that contracting officers may only use this contract type when it aligns with the requirements of FAR subpart 16.3 (which governs cost-reimbursement contracts generally) and FAR part 15 (which covers contracting by negotiation). Additionally, it references a specific fee limitation for cost-reimbursement construction contracts found in FAR 15.404-4(c)(4)(i). This section ensures that cost-reimbursement contracts are used appropriately and only under circumstances where their use is justified and compliant with broader FAR requirements.
Key Rules
- Use of Cost-Reimbursement Contracts
- Cost-reimbursement contracts for construction are permitted only if consistent with FAR subpart 16.3 and part 15.
- Fee Limitation
- Contracting officers must adhere to the fee limitation specified in FAR 15.404-4(c)(4)(i) when awarding cost-reimbursement construction contracts.
Responsibilities
- Contracting Officers: Must ensure the use of cost-reimbursement contracts for construction is justified, follows FAR 16.3 and 15, and complies with fee limitations.
- Contractors: Should be aware that cost-reimbursement contracts for construction are subject to specific regulatory constraints and fee caps.
- Agencies: Must oversee that such contracts are awarded only when appropriate and in compliance with all referenced FAR provisions.
Practical Implications
- This section exists to prevent the inappropriate use of cost-reimbursement contracts in construction, which can expose the government to higher costs and risks.
- It impacts daily contracting by requiring careful justification and adherence to specific rules before selecting this contract type.
- Common pitfalls include failing to document the justification for using cost-reimbursement or exceeding the allowable fee cap.