KRS 45A.130: Cost reimbursement contracts.

(1) No contract providing for the reimbursement of the contractor's cost plus a fixed

fee, hereinafter referred to as a cost reimbursement contract, may be made under

KRS 45A.085, 45A.090 or 45A.095, unless it is determined in writing by the

secretary of the F inance and Administration Cabinet that such contract is likely to

be less costly to the Commonwealth than any other type of contract, or that it is

impracticable to obtain supplies or services of the kind or quality required except

under such a contract.

(2) Each contractor under a cost reimbursement type contract shall give notice, as

provided for in the contract, before entering into:

(a) A cost reimbursement type subcontract; or

(b) Any other type of subcontract involving more than ten thousand dollars

($10,000), or ten percent (10%) of the estimated cost of the prime contract.

(3) All cost reimbursement type contracts shall contain a provision that only costs

recognized as allowable, in accordance with cost principles set forth in regulations

issued pursuant to KRS 45A.215, will be reimbursable.