Code of Federal Regulations Title 48. Federal Acquisition Regulations System 48.42.709-7 Contract clause

Use the clause at 52.242–3, Penalties for Unallowable Costs, in all solicitations and contracts over $800,000 except fixed-price contracts without cost incentives or any firm-fixed-price contract for the purchase of commercial items. Generally, covered contracts are those which contain one of the clauses at 52.216–7, 52.216–16, or 52.216–17, or a similar clause from an executive agency's supplement to the FAR.