[Code of Federal Regulations]

[Title 48, Volume 1]

[Revised as of October 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 48CFR16.101]



[Page 303]

 

            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.