What Is a Firm Fixed Contract

(1) A cost-plus-fee incentive contract is appropriate for development and testing services or programs if (b) the application. A quantitative contract may be used if it can be determined in advance that: (iii) For supplies and services, the item number, subheading number (if any), description, quantity and unit price, or estimated costs and charges (if applicable). The corresponding extension number and the subheading number of the basic contract shall also be indicated. (d) restrictions on the use of on-demand contracts for advisory and support services. (c) Each contract letter shall contain, as required by clause 52.216-25, Contract Definition, a negotiated definition plan that includes (1) data for the submission of the Contractor`s price proposal, required certified cost or price data, and data other than certified cost or price data; and, if necessary, manufacturing or purchasing and subcontracting plans, (2) a date for the start of negotiations and (3) a target date for definition, which should be the earliest possible date for definition. The schedule provides for a definition of the contract within 180 days of the date of the contract letter or before the completion of 40% of the work to be performed, whichever comes first. However, in extreme cases and in accordance with the Agency`s procedures, the contracting entity may authorise a grace period. If, after exhausting all reasonable efforts, the Client and the Contractor are unable to negotiate a final contract because they have not reached an agreement on the price or fees, the clause of 52.216-25 obliges the Contractor to continue the Work and provides that the Client, with the consent of the head of the contractual activity, determine a reasonable price or cost in accordance with paragraphs 15.4 and 31, subject to appeal in accordance with the dispute resolution clause. (b) The types of contracts can be divided into two broad categories: fixed-price contracts (see subsection 16.2) and reimbursement contracts (see subsection 16.3).

Specific types of contracts range from fixed fixed price, where the contractor assumes full responsibility for the cost of performance and the resulting profit (or loss), to costs plus the fixed price, where the contractor assumes only minimal responsibility for the cost of performance and the negotiated commission (profit) is fixed. In between, there are the various incentive contracts (see subsection 16.4), where the contractor`s liability for performance costs and incentives for the benefits or fees offered is tailored to the uncertainties in the performance of the contract. (i) the award of a follow-up contract is delayed by circumstances which could not reasonably have been foreseen at the time of the conclusion of the initial contract; and (d) the nature and complexity of the requirement. Complex requirements, especially those that apply only to government, generally lead to greater risk-taking by the government. This is especially true for complex research and development contracts where performance uncertainties or the likelihood of changes make it difficult to estimate service costs in advance. If a request is repeated or when mass production begins, the cost risk should be transferred to the contractor and a fixed-price contract should be considered. FFP contracts can lead to administrative burdens and cause buyers to miss out on the potential for savings. However, they are well suited to routine services such as training, administrative support and other basic services. A cost-award fee contract is a reimbursement contract that provides for a fee consisting of (a) a basic amount (which may be zero) determined at the beginning of the contract and (b) an additional amount based on a government assessment and sufficient to establish excellent performance of the contract.

Contracts with award fees plus awards are included in subsection 16.4, Incentive Contracts. See 16.401 (e) for a more detailed description and discussion of the application of these treaties. For restrictions, see 16.301-3 and 16.401(e)(5). (i) The Procuring Entity shall give each successful bidder a fair chance to be considered for a supply order or order of more than USD 3,500, unless one of the following legal exceptions applies: (2) Give all contractors who have responded to the notice a fair opportunity to submit a tender and consider that tender fairly. (f) insert the provision referred to in points 52.216-27, single or multiple award, in invitations to tender for contracts of indefinite duration which may give rise to multiple contracts. Edit the determination to specify the estimated number of rewards. Do not use this provision for counselling and support services that exceed 3 years and $15 million (including all options). (4) The planned work orders are so project-related that only one contractor can perform the work properly; (a) Description.

An indeterminate quantity contract provides, within specified limits, for an indefinite quantity of supplies or services during a given period. The government issues ordinances for individual requirements. Quantity limits can be specified as a number of units or as monetary values. (2) The contract contains, to the extent possible, the maximum limit of the contractor`s delivery obligation and the government`s obligation to order. The contract may also specify maximum or minimum quantities that the government can order as part of each individual order and the maximum amount it can order during a given period. (4) The time entrepreneurs need to make informed business decisions about whether to respond to potential orders. (1) provide adequate notification of the intention to purchase, including a clear description of the supplies or services to be provided and the basis on which the selection is made to all contractors offering the supplies or services required under the multiple procurement contract; and (c) Restrictions. No fixed-price contract will be awarded unless customer complies with all the restrictions set forth in sections 15.404-4(c)(4)(i) and 16.301-3. (2) If the contract is a works contract and contains clause 52.232-27, Prompt payment of works contracts, the contracting authority shall apply clause 52.216-7 with its assistant I. This section describes the types of contracts that can be used in acquisitions.

It prescribes policies and procedures and provides guidance on selecting a type of contract that is appropriate for the circumstances of the acquisition. (g) the period of execution or the duration of production. In times of economic uncertainty, contracts that extend over a relatively long period of time may require an economic price adjustment or price revaluation clauses. (4) Prior to the award of the contract or contract, appropriate State resources are available for the award and management of a contract other than a fixed price (see 7.104(e)). This includes appropriate government oversight during implementation in accordance with section 1.602-2 to provide reasonable assurance that effective methods and cost controls are applied. Description. A working hours contract is a variation of the time and material contract that differs only in that the materials are not provided by the contractor. See 12.207(b), 16.601(c) and 16.601(d) for the application and restrictions, for time and material contracts, which also apply to hourly employment contracts. See 12.207 (b) for the use of working time contracts for certain commercial services. (3) Price orders.

Where the contract does not specify the price of the supply or service, the procuring entity shall fix the prices of each contract in accordance with the guidelines and methods referred to in Part 15.4. (d) The legal preference for multiple allocation introduced in this subsection does not apply to architect-engineer contracts subject to the procedures set out in paragraph 36.6. However, organizations shall not be precluded from awarding multiple awards for architectural engineering services using the procedures set out in this subsection, provided that the selection of contractors and the award of the contract are in accordance with Part 36.6. (a) Description. A volume contract provides for the delivery of a certain quantity of certain deliveries or services for a certain period of time, with deliveries or services scheduled to order at certain locations. (c) restrictions. No fee plus incentive fee contract will be awarded unless all restrictions of 16-301-3 are met. (2) Declare or imply a government agreement to provide future contracts or orders to the Contractor; or (1) Each contract file shall contain documents indicating why the respective type of contract was selected. This should be documented in the procurement plan or contract file if a written procurement plan is not required under agency procedures.


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