1511 Contract Types

Question 1

What FAR Part covers Contract Types?

Answer 1

FAR Part 16

Question 2

What are the two major types of contracts?

Answer 2

• Fixed price contracts

* Cost reimbursement contracts

Question 3

Which type of contract arrangement puts the risk on the contractor? Government?

Answer 3

Fixed Price/Cost reimbursement

Question 4

What type of contract must be awarded for a commercial item?

Answer 4

Fixed Price

Question 5

What Factors are used in Selecting Contract Type

Answer 5

 Price competition
 Price analysis
 Cost analysis
 Type and complexity of requirement
 Urgency of requirement
 Period of performance or length of production run
 Contractor’s technical capability and financial responsibility
 Adequacy of contractor’s accounting system
 Concurrent contracts
 Extent and nature of proposed subcontract
 Acquisition history

Question 6

__________ contracts shall be firm-fixed price or fixed-price economic price adjustment

Answer 6

Sealed bid

Question 7

When do you use a Fixed Price Contracts with Economic Price Adjustment?

Answer 7

This contract type might be used when you had an item that contained a commodity that fluctuated over time such as petroleum

Question 8

What is a Firm Fixed Price, Level of Effort Term Contract?

Answer 8

• Specified level of effort, over a set time period
• Reasonable assurance that the intended result cannot be achieved by expending less than the stipulated effort
• Normally used when buying an investigation or study in a research area
• Deliverable product is generally a technical report
• Payment is based on the effort expended rather than on the results achieved

Question 9

What is a Fixed Price Incentive Contract?

Answer 9

Fixed price contract that provides for adjusting profit and establishing the final contract price by a formula based on the relationship of final negotiated total cost to total target cost. Incentivizes the KTR to reduce costs

Question 10

What is a Cost Plus Award Fee (CPAF) Contract?

Answer 10

Contract for a base amount (which may be zero) fixed at inception of the contract and an award amount, based on judgmental evaluation by the Government, sufficient to provide motivation for excellence

Question 11

What is a Time and Materials Contract?

Answer 11

T&M contracts provide for acquiring supplies or services on the basis of direct labor hours at specified fixed hourly rates that include wages, overhead, general and administrative expenses, and profit; and actual cost for materials

Question 12

How long do you have to definitize a letter contract?

Answer 12

Within 180 days or 40% completion

Question 13

What document must be completed prior to awarding a Time and Materials contract?

Answer 13

The KO must complete a Determination and Findings (D&F)

Question 14

What is a determination and findings?

Answer 14

An MFR explaining a decision a KO made concerning an acquisition. In the memo the KO will explain their rational and provide all relevant information they used to arrive at their decision. D&Fs are commonly required in the following instances :
• Other than full and open competition (i.e. sole source)
• Options, Modifications,
• Contract Type (i.e. Time and Material)