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(1) Precontract costs are applicable only to -
(i) Sole source awards, except those resulting in firm-fixed price or fixed-price with economic price adjustment contracts; or
(ii) Awards resulting from broad agency announcements.
(2) The procurement officer is the approval authority for the use of precontract costs. Authorization must be in writing and shall address the following:
(i) the necessity for the contractor to initiate work prior to contract award.
(ii) the start date of such contractor effort.
(iii) the total estimated time of the advanced effort.
(iv) the cost limitation.
(3) Authorization to incur precontract costs must be provided to the contractor in writing and shall include the following:
(i) the start date for incurrence of such costs.
(ii) the limitation on the total amount of precontract costs which may be incurred.
(iii) a statement that the costs are allowable only to the extent they would have been if incurred after formal contract award.
(iv) a statement that the Government is under no obligation to reimburse the contractor for any costs unless a contract is awarded.