Key Concepts:

Terms in this set (58)

FAR 16.104 - Factors in Selecting Contract Types
-Price competition
--Results in realistic pricing, so fixed price is ordinarily in USG best interest
-Price analysis/Cost analysis
-Type/Complexity of Requirements
--Greater complexity, unique to the USG, usually result in greater risk to USG; Especially true for complex R&D contracts, when performance uncertainties or the likelihood of changes makes it difficult to estimate costs in advance
--As a requirement recurs or as quantity production begins, the cost risk should shift to the contractor and a fixed price contract should be considered
-Combining Contract Types
--If entire contract cannot be FFP, shall consider if a portion can be FFP
-Urgency of requirement
--If urgency exists, the USG may choose to assume a greater proportion of risk or it may offer incentives tailored to performance outcomes to ensure timely contract performance
-POP or length production run
--In times of economic uncertainty, contracts extending over a relatively long period may require economic price adjustment or price redetermination clauses.
-Contractor's technical/financial responsibility
-Adequate accounting system
--Before agreeing on a type other than FFP, the PCO shall ensure that the contractor's accounting system will permit timely development of all necessary cost data in the form required by the proposed contract type
-Extent and nature of proposed Subcontracts
--If the contractor proposes extensive subcontracting, a contract type reflecting the actual risks to the prime contractor should be selected
-Acquisition history
--Contractor risk usually decreases as the requirement is repetitively acquired. Also, product descriptions or descriptions of services to be performed can be defined more clearly