§ 13-215. Cost-reimbursement contracts

   (a) In general. -- A unit may not enter into a cost-reimbursement contract unless the procurement officer determines that:

   (1) a cost-reimbursement contract is likely to be less costly to the State than any other type of contract; or

   (2) except for leases of real property, the kind or quality of procurement that the unit requires could not be obtained practicably under any other type of contract.

(b) Accounting system. -- A unit may not enter into a procurement contract that is wholly or partly a cost-reimbursement contract unless the procurement officer determines that the accounting system of the contractor:

   (1) will allow timely development of all necessary cost data in the form required by the specific type of procurement contract under consideration; and

   (2) is adequate to allocate costs in accordance with generally accepted accounting principles.

(c) Required contract provision. -- A cost-reimbursement contract shall provide that costs, including costs for subcontractors, will be reimbursed only if the costs are allowable and allocable under:

   (1) the procurement contract; or

   (2) the regulations of the Board on Cost Principles.

(d) Subcontracting. -- A contractor under a cost-reimbursement contract shall give notice to and, as required under the contract, obtain approval from a procurement officer before the contractor enters into:

   (1) a cost-reimbursement subcontract; or

   (2) any subcontract involving more than:

      (i) $ 25,000; or

      (ii) 5% of the estimated cost of the procurement contract.

HISTORY: SF § 11-125, 11-127; 1988, ch. 48, § 2.