A wide selection of contract types is available to government buyers and contractors to provide necessary flexibility in acquiring the large variety and volume of supplies and services required by agencies. These contract types are listed in the Federal Acquisition Regulation (FAR) Part 16, and they 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.
Contract types range from firm-fixed-price, in which the contractor has full responsibility for the performance costs and resulting profit (or loss); to cost-plus-fixed-fee, in which the contractor has minimal responsibility for the performance costs and the negotiated fee (profit) is fixed. In between are the various incentive contracts, in which the contractor’s responsibility for the performance costs and the profit or fee incentives offered are tailored to the uncertainties involved in contract performance.
This course is intended for engineers – employed in either the private sector or government – who work with federal contracts.