[Code of Federal Regulations]
[Title 48, Volume 1]
[Revised as of October 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 48CFR16.101]

[Page 293-294]
 
            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
 
                CHAPTER 1--FEDERAL ACQUISITION REGULATION
 
PART 16--TYPES OF CONTRACTS--Table of Contents
 
                 Subpart 16.1--Selecting Contract Types
 
Sec. 16.101  General.


    (a) A wide selection of contract types is available to the 
Government and contractors in order to provide needed flexibility in 
acquiring the large variety and volume of supplies and services required 
by agencies. Contract types vary according to (1) the degree and timing 
of the responsibility assumed by the contractor for the costs of 
performance and (2) the amount and nature of the profit incentive 
offered to the contractor for achieving or exceeding specified standards 
or goals.
    (b) The contract types are grouped into two broad categories: fixed-
price contracts (see subpart 16.2) and cost-reimbursement contracts (see 
subpart 16.3). The specific contract types range from firm-fixed-price, 
in which the contractor has full responsibility for the

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performance costs and resulting profit (or loss), to cost-plus-fixed-
fee, in which the contractor has minimal responsibility for the 
performance costs and the negotiated fee (profit) is fixed. In between 
are the various incentive contracts (see subpart 16.4), in which the 
contractor's responsibility for the performance costs and the profit or 
fee incentives offered are tailored to the uncertainties involved in 
contract performance.