“SMALLTOFEDS” By Ken Larson
“In contracting for supplies and services the federal government utilizes several different contract types. The nature of these contract vehicles has evolved over a period of years based on the government experience.
At the heart of selecting the contract type is an analysis of risk involved to the contractor and the government and the administrative burden of the contract.”
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“Firm, Fixed Price contracting under FAR Part 12, “Commercial Contracting” is by far the most simple form of government contract because the contractor assumes all the risk and the price is fixed, regardless of cost incurred to the supplier. Other acquisition types, such as new technology development or service contracts in a war zone where the scope of work is unpredictable and subject to change, gravitate to cost plus or time and material contract types. These contracts pose a lower risk to the supplier but also entail considerable audit and systems support costs in both governement and contractor business operations.”
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