Hello and thank you for joining us for Episode 10 of Fun with the FAR Season 11! In our next session, we will cover FAR Part 16 (Types of Contracts). As we prepare for our 11th episode of Season 11, here are a few FAR Facts for us to think about:
- Contract types are grouped into two broad categories: fixed-price and cost-reimbursement contracts. The selection of contract type must take into account risk allocation, and should be tailored to the uncertainties involved in contract performance. FAR 16.101(b).
- Contract types that are not described in the FAR shall not be used, except as a FAR subpart 1.4 deviation. FAR 16.102(b).
- In a fixed-price contract, the contract is not subject to any adjustment on the basis of the contractor’s cost experience in performing the contract. FAR 16.202-1. This places most of the financial and performance risk on the contractor.
- The use of cost reimbursement contracts is prohibited for the acquisition of commercial products and commercial services. FAR 16.301-3(b).
- An indefinite delivery/indefinite quantity (“ID/IQ”) contract may be used when the Government cannot predetermine, above a specified minimum, the precise quantities of supplies or services it will require during the contract period, and it is inadvisable for the Government to commit for more than a minimum quantity. It should be used only when a recurring need is anticipated. FAR 16.504(b).
- Contracting officers are only required to notify unsuccessful offerors when the total price of an order issued under a multiple award ID/IQ contract exceeds $6 million. FAR 16.505(b)(6).
- Letter contracts are required to be definitized within 180 days after the date of the letter contract or before completion of 40% of the work to be performed, whichever occurs first. FAR 16.603-2(c).