The type of contract determines the expectations, rewards, and obligations for both sides of the fence, the Government and the contractor.
The type of contract determines the level of responsibility of the contractor regarding timing, cost and performance, as well as the amount and nature of the profit incentive for satisfaction of the contract.
- Fixed-Price Contracts: provides a firm price for the services or items supplied in the contract. Usually, the price is adjustable only based on target cost or ceiling price.
- Cost-reimbursement (cost-plus): the contractor is paid for all allowable expenses plus additional profit. The contractor is obligated to account for the costs.
- IDIQ: Allow more flexibility for the Government and is awarded to pre-approved vendors
- GSA Schedules: Long-term contracts that are more simplified regarding prices, terms and conditions that are awarded to private vendors who must meet requirements.
- Sole-Source contracts: can be issued without a competitive bidding process. Usually happens when only one business can fulfil the contract
- Set-Aside Contracts: a contract that is specifically meant for small businesses and requires the business to be social-economically certified. This happens automatically for contracts under $150,000