48 CFR § 16.203-3 - 16.203-3 Limitations.

---
identifier: "/us/cfr/t48/s16.203-3"
source: "ecfr"
legal_status: "authoritative_unofficial"
title: "48 CFR § 16.203-3 - 16.203-3   Limitations."
title_number: 48
title_name: "Federal Acquisition Regulations System"
section_number: "16.203-3"
section_name: "16.203-3   Limitations."
chapter_number: 1
chapter_name: "FEDERAL ACQUISITION REGULATION"
subchapter_number: "C"
subchapter_name: "CONTRACTING METHODS AND CONTRACT TYPES"
part_number: "16"
part_name: "TYPES OF CONTRACTS"
positive_law: false
currency: "2026-03-24"
last_updated: "2026-03-24"
format_version: "1.1.0"
generator: "[email protected]"
authority: "41 U.S.C. 1121(b); 40 U.S.C. 121(c); 10 U.S.C. chapter 4 and 10 U.S.C. chapter 137 legacy provisions (see 10 U.S.C. 3016); and 51 U.S.C. 20113."
regulatory_source: "48 FR 42219, Sept. 19, 1983, unless otherwise noted."
cfr_part: "16"
---


# 16.203-3 16.203-3   Limitations.

A fixed-price contract with economic price adjustment shall not be used unless the contracting officer determines that it is necessary either to protect the contractor and the Government against significant fluctuations in labor or material costs or to provide for contract price adjustment in the event of changes in the contractor's established prices.