243.204-70-4 Limitations on obligations.
(a) The Government shall not obligate more than 50 percent of the not-to-exceed price before definitization. However, if a contractor submits a qualifying proposal before 50 percent of the not-to-exceed price has been obligated by the Government, the limitation on obligations before definitization may be increased to no more than 75 percent (see 232.102-70 for coverage on provisional delivery payments).
(b) Obligations should be consistent with the contractor's requirements for the undefinitized period.
[75 FR 48277, Aug. 10, 2010]