### Question
How does the law define covered contract?


### Answer
Under *41 U.S.C. § 4301*, **covered contract** is defined as:

> a contract for an amount in excess of $500,000 that is entered into by an executive agency, except that the term does not include a fixed-price contract without cost incentives or any firm fixed-price contract for the purchase of commercial items

#### Citation:
  - *41 U.S.C. § 4301*
  - Heading: **Subtitle I-Federal Procurement Policy > Division C-Procurement > CHAPTER 43-ALLOWABLE COSTS**

