Limits on Liability

Many companies have standard terms in their sales contracts that limit their liability for damages. Some limits are expressed as a multiple of the contract value; some have a fixed cap such as $1 million. In a commercial setting, this can be rejected completely by the buyer, or it can be negotiated.

Question: is there any law or regulation that prohibits the government from agreeing to a cap on a contractor's liability? I'm not looking for advice on how to set a cap, when it might be appropriate, or the wisdom of doing it. I just want to know if it can be negotiated, or whether there is a prohibition on it; perhaps something like the ADA preventing the government from agreeing to indemnify a contractor.

Note that standard FAR terms and conditions for commercial items relieves the contractor of liability. See paragraph (p) from 52.212-4, Contract Terms and Conditions -- Commercial Items (Jun 2010):

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(p) Limitation of liability. Except as otherwise provided by an express warranty, the Contractor will not be liable to the Government for consequential damages resulting from any defect or deficiencies in accepted items.

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