[Code of Federal Regulations]
[Title 48, Volume 1]
[Revised as of October 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 48CFR16.101]

[Page 292]
 
            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
 
                CHAPTER 1--FEDERAL ACQUISITION REGULATION
 
PART 16_TYPES OF CONTRACTS--Table of Contents
 
                  Subpart 16.1_Selecting Contract Types
 
Sec.  16.101  General.


    (a) 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.
    (b) The contract types are grouped into two broad categories: fixed-
price contracts (see subpart 16.2) and cost-reimbursement contracts (see 
subpart 16.3). The specific 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 (see subpart 16.4), 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.