Original Source: US Dept. of Energy
“First there must be an understanding of what a contract is. A contract is a mutually binding legal relationship obligating the seller to furnish the supplies or services and the buyer to pay for them. It includes all types of commitments that obligate the Government to an expenditure of appropriated funds and that, except as otherwise authorized, are in writing. Thereby, a contract sets up arrangements that are clear and certain regarding the relationship and performance requirements of the parties involved. In the case of a government contract, when an agency desires to procure goods and services, a contract is the appropriate method of mutually binding the parties to their promise. The Federal Acquisition Regulations (FAR) governs the use of the many types of government contracts.
The purpose of this document is to provide general guidance regarding contract types as described under FAR Part 16. This guide is not intended to supersede information contained in the FAR.
There are different meanings associated with the term “contract type.” In one sense, it signifies different compensation arrangements, of which there are many. However, most compensation arrangements fall into two major groups: cost reimbursement or fixed price. In another sense, the term “contract type” is used to signify differences in contract structure or form. For example, this structure could be a letter contract, purchase order, performance-based, completion, or term contract. Finally, the term “contract type” is used to identify an intended end purpose. Examples of this would be contracts such as, management and operating, research and development, and supply. Consistent with the FAR, this guide focuses on compensation and contract structure to describe “contract type.” However, none of these connotations is mutually exclusive, as a contract represents each of these terms. Together, these “contract types” will help ensure the success of a contract.
A wide selection of contract types is available to the Department of Energy (DOE) and its contractors to provide flexibility in acquiring the large variety and volume of supplies and services needed by DOE to fulfill and support its mission. However, no single contract type is right for every contracting situation. Selection must be made on a case-by-case basis, considering many programmatic, performance and financial factors. The goal is to select the contract type that will result in the most optimum business arrangement between the parties…”
https://www.energy.gov/sites/prod/files/maprod/documents/AcqGuide16pt1.pdf
Contributors: Open SourceCategories: SIG U Resource, Tool
SRC Type: Contract Development, Sourcing