Season 10: Episode 11 “FAR Facts”

Hello and thank you for joining us for our first ten Episodes of Fun with the FAR Season 10!
Our next session will cover: FAR Parts 16 (Types of Contracts)

As we prepare for our eleventh episode of Season 10, 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).
  • A non-exclusive list of factors that should be considered in selecting contract type can be found at FAR 16.104.
  • A fixed-price-level-of-effort contract type provides for the contractor to perform a specified level of effort (i.e., hours by labor category) and total fixed dollar amount to be paid for at the completion of that stated level of effort or periodically during contract performance (i.e., monthly). FAR 16.207-1. This contract type is suitable for the procurement of investigations or studies where payment is based on the on the effort expended rather than on the results achieved. FAR 16.207-2.
  • The use of cost reimbursement contracts is prohibited for the acquisition of commercial products and commercial services. FAR 16.301-3(b).
  • A cost-plus-fixed-fee contract normally should not be used in development of major systems once the Government—through exploration, studies and risk reduction—has determined that development of the system is “achievable” and has established reasonably firm performance objectives and schedules. FAR 16.306(b)(2).

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