The secretary of the Finance and Administration Cabinet shall issue regulations setting forth cost principles which shall be used:
(1) As guidelines in the negotiation of:
(a) Estimated costs or fixed prices when the absence of open market competition precludes the use of competitive sealed bidding;
(b) Adjustments for state-directed changes or modifications in contract performance; and (c) Settlements of contracts which have been terminated.
(2) To determine the allowability of incurred costs for the purpose of reimbursing costs under contract provisions which provide for the reimbursement of costs; and (3) As appropriate in any other situation where the determination of the estimated or the incurred costs of performing contracts may be required.