Potential FAR Overhaul
- Global Dynamic Consulting
- Jun 2
- 1 min read
Amidst the buzz of a potential FAR overhaul, some federal procurement fundamentals remain timeless. This week, we’re spotlighting contract type selection—a cornerstone of effective government contracting. Here’s what drives the choice:
Key Factors: Risk (the top driver), price/fee, complexity, project limitations, funding, urgency, and performance period.
Contract Types (from most to least preferred):
Firm-Fixed Price (FFP): Low government risk, ideal for routine, well-defined deliverables.
Fixed-Price Variants (FPEPA, FPIF, etc.): Balances risk with incentives for moderate complexity.
Cost-Reimbursable (CPFF, CPIF, CPAF): Suits high-complexity, unique projects with higher government risk.
Time-and-Materials/Labor Hour (T&M/LH): Least preferred, used for undefined scopes or R&D.
Goals: Motivate cost efficiency, balance risk fairly, ensure contractor accountability, and minimize administrative burden.
No matter how regulations evolve, mastering these principles is key to success in federal procurement.
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