Edited by a Certified Professional Contracts Manager (CPCM), this excellent reference book discusses fixed-price, cost-reimbursement, & incentive contract types. The mechanics of the various types of contracts are also discussed with respect to cost risk; profit & fee considerations; & incentives. Discover the many forms of contracts, & learn how to select the appropriate contract vehicle. Itemizes specific contract families, classes, forms, & styles. This book answers the following questions & more: Why is the firm-fixed price contract called the "ultimate" cost incentive arrangement? Why do numerous limitations govern the use of a redeterminable contract? In a cost-plus-award-fee contract, is it possible for the customer to unilaterally change the evaluation plan during performance? Is it ever appropriate to consider a "services contract" a lease? Numerous figures illustrate the various contract type concepts, giving the reader valuable interpretations & comparisons of the cost & risk tradeoffs in selecting certain contract types. A bibliography, a glossary, & an index are included. Ask about our quantity discounts, & request a FREE National Contract Management Association Educational Products Catalogue. To order contact: National Contract Management Association, 1912 Woodford Rd., Vienna, VA 22182, or call 800-344-8096.
Everything You Need to Know About Government Contract Types As the world's single largest buyer of goods and services, the federal government has many ways to structure its procurements. Different situations and conditions often determine the best vehicle for a particular purchase. Contracting officers must assess a wide range of factors to determine which contract type will provide the government the best value and the least risk. The Complete Guide to Government Contract Types provides a comprehensive overview of the key government contract vehicles and types: fixed-price, cost-reimbursement, incentive, and other (which includes letter, indefinite-delivery/indefinite-quantity, and time-and-material contracts). The author first explains the selection process for contract vehicles, which is the basis for selecting the appropriate contract type for the work in question. He then presents a comprehensive, in-depth analysis of each contract type, explaining how each works best to meet certain types of requirements and conditions. This is an essential resource for both contracting officers and contractors seeking to understand and work effectively within the nuances of contract selection and compliance.
Federal procurement contracts are divided into 2 types fixed-price and cost reimbursement -- that differ as to whether the gov't. or the contractor assumes the risk of increases in costs (e.g., wages, materials). There was an increase in the use of cost-reimbursement contracts during the George W. Bush Admin. The Obama Admin. wants to reduce by at least 10% the funds obligated in FY 2010 by "high risk-contracting authorities," such as cost-reimbursement, time-and-materials, and labor-hour contracts. Contents of this report: Intro.; Selecting the Contract Type; Types of Contracts; Recently Enacted and Proposed Legislation; Executive Branch Initiatives; Developments Re: Contract Types, 107th-110th Cong. A print on demand report.
Selection of the type of contract is a primary mechanism DoD contracting professionals use to manage the risks inherent in the procurement of materiel and services. The contract type determines the degree of risk that is allocated between the contractor and the DoD. The contract type also establishes the degree to which unique government requirements are applicable to the procurement. The objective for DoD contracting professionals is to select a contract type that results in reasonable contractor risk with the greatest incentive for efficient and economical contract performance (best value). DoD contracting professionals do not always adequately take into account the effect of the terms and conditions when planning for the contract type used for procurement of materiel and services. This results in contracting decisions that impose a greater total cost to the DoD than appropriate to mitigate contract risk. This leads to procurement of materiel and services that do not provide the best value to the DoD. This research paper addresses the process for selection of contract type, the major DoD requirements based on contract type, problems associated with the consideration of these requirements during the selection of contract type, and recommended improvements.
Federal procurement contracts are commonly divided into two main types--fixed-price and cost-reimbursement--that primarily differ as to whether the government or the contractor assumes the risk of increases in performance costs (e.g., wages, materials). With a fixed-price contract, the contractor assumes this risk because it agrees to provide goods or services to the government for a certain price established at the time of contracting. If the performance costs exceed this price, the contractor generally cannot, absent a price adjustment clause, recover more money from the government. Rather, it must perform the contract at a loss, or default on the contract. In contrast, with a cost-reimbursement contract, the government assumes the risk of increases in performance costs because it agrees to repay the contractor for the allowable costs of performing certain work up to a total cost specified in the contract. Additionally, under certain types of cost-reimbursement contracts, the contractor may be entitled to profit in the form of fixed fees or incentive or award fees. Contracts can also be divided into other types, including incentive contracts, letter contracts, indefinite-delivery/indefinite-quantity (ID/IQ) contracts, and time-and-materials (T&M) contracts. Particular contracts can display features of various types (e.g., pricing on both fixed- price and cost-reimbursement bases for different line items) and can often be of multiple types (e.g., an ID/IQ T&M letter contract). Determining the type of a particular contract is a question of law, and contract language stating that a contract is of a certain type is not dispositive. The use of certain contract types is prohibited or required in certain circumstances: (1) cost-plus-a-percentage-of-cost contracts are absolutely prohibited; (2) cost-reimbursement contracts cannot be used to acquire commercial items; and (3) contracts resulting from sealed bidding must be firm-fixed-price or fixed-price with an economic price adjustment. Outside of these restrictions, however, selection of the contract type for a particular procurement is generally within the contracting officer's discretion. The contracting officer typically decides on the contract type prior to issuing a solicitation. However, particularly in negotiated procurements, selection of the contract type can be "a matter for negotiation" between the procuring activity and the contactor. Current congressional and public interest in contract types is, in part, an outgrowth of the reported increase in the use of cost-reimbursement contracts during the George W. Bush Administration and the Obama Administration's proposal to reduce by at least 10% the funds obligated in FY2010 by "high risk-contracting authorities," such as cost-reimbursement, time-and-materials, and labor-hour contracts. The Department of Defense's (DOD's) budget request for FY2011 similarly proposed a 17% reduction in the use of time-and-materials and labor-hour contracts. Additionally, the Office of Management and Budget (OMB) has called for agencies to include "specific actions and goals" to reduce their reliance on cost-reimbursement and time-and-materials contracts in their FY2012 budget submissions. This call is part of a broader proposal to cut agencies' discretionary spending by 5%, among other things. The 111th Congress has enacted or proposed several bills that address use of various types of contracts, including P.L. 111-5, P.L. 111-23, P.L. 111-84, P.L. 111-118, H.R. 1665, H.R. 2269, H.R. 3619, H.R. 4983, H.R. 5013, H.R. 5136, S. 920, S. 1194, S. 2901, S. 2971, S. 3454, S. 3455, S. 3607, S. 3611, and S. 3676.
Your Go-to Resource for Government Contract Source Selection! From planning to protest and all the steps in between, Understanding Government Contract Source Selection is the one reference all government acquisition professionals and contractors should keep close at hand. This valuable resource provides straightforward guidance to ensure you develop a firm foundation in government contract source selection. Government acquisition professionals can reference this book for guidance on: • Preparing the acquisition and source selection plans • Drafting evaluation criteria and proposal preparation instructions • Creating a scoring plan and rating method • Drafting the RFP and SOW • Conducting a pre-proposal conference • Preparing to receive proposals and training evaluators • Evaluating technical, management, and cost proposals • Avoiding protest Contractors can reference this book for guidance on: • Selling to the federal government • Reviewing a draft RFP and providing comments • Participating in a pre-proposal conference • Preparing a proposal that complies with RFP requirements • Developing a strategy for teaming agreements, subcontracts, and key personnel • Negotiating a contract • Getting the most out of post-award debriefings • Filing a protest PLUS! Understanding Government Contract Source Selection provides a source selection glossary, an extensive case study, and sample proposal preparation instructions in the appendices to help you navigate the federal competitive source selection process. This complete guide is an indispensable resource for anyone striving to build their knowledge of government contract source selection!
Which Contract? is an invaluable desktop companion to be turned to at the start of every new project and is recommended to any professional whose clients expect him or her to know the contemporary procurement landscape inside out.Providing clear guidance on how to identify the most appropriate procurement strategy and contract for a given set of circumstances, it has been brought fully up to date to take account of the latest editions of all the recognised forms from JCT 2011 to FIDIC.
A wide selection of contract types is available to the Government and contractors in order to provide needed flexibility in acquiring the large variety and volume of supplies and services required by agencies. Contract types vary according to (1) the degree and timing of the responsibility assumed by the contractor for the costs of performance and (2) the amount and nature of the profit incentive offered to the contractor for achieving or exceeding specified standards or goals. The two broad categories of contract types available for use in Government contracting are fixed-price and cost-reimbursement. The objective of selecting a contract type is to reasonably allocate performance risk between the contractor and Government while providing incentive to the contractor to perform efficiently and economically. It is important to select the contract type that places the appropriate level of responsibility on the contractor to successfully perform and that is commensurate with the technical and cost uncertainties. Contract types range from Firm-Fixed-Price (FFP) which places maximum risk on the contractor and minimum risk and administrative burden on the Government to Cost-Plus-Fixed-Fee (CPFF) which places minimum risk on the contractor and maximum risk on the Government. (See Appendix (A) for a list of contract types).
