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1. The contracting authority may opt for a full or partial cost-reimbursement contract under the conditions laid down in paragraph 3.

2. The price to be paid under a cost-reimbursement contract shall consist of the reimbursement of:

(a) all direct costs actually incurred by the contractor in performing the contract, such as expenditure on labour, materials, consumables and use of the equipment and infrastructures necessary to perform the contract;

(b) indirect costs;

(c) a fixed profit; and (d) an appropriate incentive fee based on achieving objectives in respect of performance and delivery schedules.

3. The contracting authority may opt for a full or partial cost-reimbursement contract in cases where it is difficult or unsuitable to provide an accurate fixed price due to the uncertainties inherent in the performance of the contract because:

(a) the contract has very complex features or features which require the use of a new technology and, therefore, includes a significant number of technical risks; or (b) the activities subject to the contract must, for operational reasons, start immediately even though it is not yet possible to determine an accurate fixed price in full due to significant risks or because the performance of the contract depends in part on the performance of other contracts.

4. Cost-reimbursement contracts shall stipulate a maximum ceiling price. The maximum ceiling price for a full or partial cost-reimbursement contract shall be the maximum price payable. The price may be modified in accordance with Article 172 of the Financial Regulation.