102 
(i) a requirement that firm, fixed price contracts or fixed 
price with economic price adjustment contracts be used to the 
maximum extent practicable; 
(ii) a prohibition on use of cost type contracts; and 
(iii) subject to subparagraph (B), authority for use of a 
time-and-materials or labor-hour contract for the procurement 
of commercial services that are commonly sold to the general 
public through those contracts and are purchased by the pro-
curing agency on a competitive basis. 
(B) WHEN TIME-AND-MATERIALS OR LABOR-HOUR CONTRACT 
MAY BE USED.—A time-and-materials or labor-hour contract may 
be used pursuant to the authority referred to in subparagraph 
(A)(iii)— 
(i) only for a procurement of commercial services in a cat-
egory of commercial services described in subparagraph (C); 
and 
(ii) only if the contracting officer for the procurement— 
(I) executes a determination and findings that no 
other contract type is suitable; 
(II) includes in the contract a ceiling price that the 
contractor exceeds at its own risk; and 
(III) authorizes a subsequent change in the ceiling 
price only on a determination, documented in the con-
tract file, that it is in the best interest of the procuring 
agency to change the ceiling price. 
(C) CATEGORIES OF COMMERCIAL SERVICES.—The categories of 
commercial services referred to in subparagraph (B) are as fol-
lows: 
(i) Commercial services procured for support of a commer-
cial item, as described in section 103(5) of this title. 
(ii) Any other category of commercial services that the Ad-
ministrator for Federal Procurement Policy designates in the 
Federal Acquisition Regulation for the purposes of this sub-
paragraph on the basis that— 
(I) the commercial services in the category are of a 
type of commercial services that are commonly sold to 
the general public through use of time-and-materials or 
labor-hour contracts; and 
(II) it would be in the best interests of the Federal 
Government to authorize use of time-and-materials or 
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103 
labor-hour contracts for purchases of the commercial 
services in the category. 
(5) CONTRACT
QUALITY
REQUIREMENTS.—Regulations prescribed 
under paragraph (1) shall include provisions that— 
(A) allow, to the maximum extent practicable, a contractor 
under a commercial items acquisition to use the existing quality 
assurance system of the contractor as a substitute for compliance 
with an otherwise applicable requirement for the Federal Govern-
ment to inspect or test the commercial items before the contrac-
tor’s tender of those items for acceptance by the Federal Govern-
ment; 
(B) require that, to the maximum extent practicable, the execu-
tive agency take advantage of warranties (including extended war-
ranties) offered by offerors of commercial items and use those 
warranties for the repair and replacement of commercial items; 
and 
(C) set forth guidance regarding the use of past performance of 
commercial items and sources as a factor in contract award deci-
sions. 
§ 3308. Planning for future competition in contracts for 
major systems 
(a) DEVELOPMENT CONTRACT.— 
(1) DETERMINING WHETHER PROPOSALS ARE NECESSARY.—In pre-
paring a solicitation for the award of a development contract for a 
major system, the head of an agency shall consider requiring in the so-
licitation that an offeror include in its offer proposals described in 
paragraph (2). In determining whether to require the proposals, the 
head of the agency shall consider the purposes for which the system 
is being procured and the technology necessary to meet the system’s 
required capabilities. If the proposals are required, the head of the 
agency shall consider them in evaluating the offeror’s price. 
(2) CONTENTS OF PROPOSALS.—The proposals that the head of an 
agency is to consider requiring in a solicitation for the award of a de-
velopment contract are the following: 
(A) Proposals to incorporate in the design of the major system 
items that are currently available within the supply system of the 
Federal agency responsible for the major system, available else-
where in the national supply system, or commercially available 
from more than one source. 
(B) With respect to items that are likely to be required in sub-
stantial quantities during the system’s service life, proposals to in-
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