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Types of Government Contracts

(3) Incentive Contracts
(3) Incentive Contracts

Fixed-price incentive (successive targets) contracts: A fixed-price incentive (successive targets) contract specifies the following elements, all of which are negotiated at the outset: Fixed-price contracts with award fees (FPAF) Award-fee provisions may be used in fixed-price contracts when the Government wishes to motivate a contractor and other incentives cannot be used because contractor performance cannot be measured objectively.

source: acqnotes.com
(4) Indefinite - Delivery Contracts
(4) Indefinite - Delivery Contracts

Indefinite delivery, indefinite quantity contracts provide for an indefinite quantity of services for a fixed time. They are used when GSA can’t determine, above a specified minimum, the precise quantities of supplies or services that the government will require during the contract period.

source: gsa.gov
(5) Time - And-Materials Contracts
(5) Time - And-Materials Contracts

A time-and-materials contract may be used only when it is not possible at the time of placing the contract to estimate accurately the extent or duration of the work or to anticipate costs with any reasonable degree of confidence. See 12.207(b) for the use of time-and-material contracts for certain commercial services. (1) Government surveillance.

(6) Labor - Hour Contracts
(6) Labor - Hour Contracts

Subpart 16.6—Time-and-Materials, Labor-Hour, and Letter Contracts 16.600 Scope. Time-and-materials contracts and labor-hour contracts are not fixed-price contracts. 16.601 Time-and-materials contracts. (a) Definitions for the purposes of Time-and-Materials Contracts.

(7) Sealed Bidding
(7) Sealed Bidding

The process may seem straightforward, but strict rules apply and compiling bids can be a tedious process. Government Proposals. Government agencies typically issue a request for proposals (RFP) when the award will be based on more than price. Like sealed bids, proposals are typically used for larger purchases, but they're much more detailed than bids.

source: onvia.com
(8) Negotiation
(8) Negotiation

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Cost Plus Fixed fee Contract
Cost Plus Fixed fee Contract

16.306 Cost-plus-fixed-fee contracts. (a) Description. A cost-plus-fixed-fee contract is a cost-reimbursement contract that provides for payment to the contractor of a negotiated fee that is fixed at the inception of the contract.

Cost Plus Percentage of Cost Contract
Cost Plus Percentage of Cost Contract

Q. Is the contract outlined below a cost plus percentage of cost contract, even if the modifications show a target cost, base fee and maximum available award fee? Cost plus award fee contract. 8 percent base. 7 percent award fee. Contract ceiling $508 million. Contract grows due to scope changes over a six-month period to almost $1 billion.

Item Rate Contract/Unit Price Contract
Item Rate Contract/Unit Price Contract

The contractor bears almost no risk in these contracts, except escalation in the rates of items quoted by the contractor, as it is paid according to the actual amount of work on the basis of the per-unit price quoted.

source: answers.com
Lump sum and Scheduled Contract
Lump sum and Scheduled Contract

It is not unusual to combine a Unit Price Contract for parts of the project with a Lump Sum Contract or other types of contracts. Cost Plus Contract.

Lump sum Contract
Lump sum Contract

A lump-sum contract is normally used in the construction industry to reduce design and contract administration costs. It is called a lump-sum because the contractor is required to submit a total and global price instead of bidding on individual items.

Special Contracts
Special Contracts

Leaving aside government contracts for grants or loans, most government contracts are for the acquisition by the U.S. government of goods or services. At the heart of federal government contract law is the Federal Acquisition Regulations or the FAR.

source: mwllegal.com