Types of Federal Government Contracts

Understanding Federal Contract Types to Bid Strategically

Federal agencies use various contract types based on risk, scope, pricing, and deliverables. At Dynamic Contracts Consultants LLC, we help clients navigate, negotiate, and manage contracts across all federal acquisition categories. Understanding these contract structures is essential to crafting responsive bids and ensuring compliant performance.

🔹 1. Fixed-Price Contracts (FAR Part 16.2)

Definition: The contractor agrees to deliver goods or services for a set price, regardless of actual costs.

Common Subtypes:

  • Firm-Fixed-Price (FFP)

  • Fixed-Price with Economic Price Adjustment (FPEPA)

  • Fixed-Price Incentive (FPI)

Best For: Well-defined scopes with minimal risk of change.

🔹 2. Cost-Reimbursement Contracts (FAR Part 16.3)

Definition: The government reimburses allowable, allocable, and reasonable costs incurred, plus a fee.

Common Subtypes:

  • Cost-Plus-Fixed-Fee (CPFF)

  • Cost-Plus-Incentive-Fee (CPIF)

  • Cost-Plus-Award-Fee (CPAF)

Best For: R&D projects or uncertain scopes where flexibility is needed.

🔹 3. Time-and-Materials (T&M) & Labor-Hour Contracts (FAR 16.6)

Definition: The government pays a fixed hourly rate plus materials (T&M) or only labor (Labor-Hour).

Best For: Services where scope cannot be precisely defined at the outset.

🔹 4. Indefinite Delivery Contracts (IDC) (FAR 16.5)

Definition: A flexible contract for supplies/services over a period, with delivery orders issued as needed.

Types Include:

  • Indefinite-Delivery/Indefinite-Quantity (IDIQ)

  • Definite-Quantity

  • Requirements Contracts

Best For: Recurring needs (e.g., IT, logistics, training) with uncertain volume.

🔹 5. Blanket Purchase Agreements (BPAs)

Definition: Simplified agreements for recurring buys from GSA Schedule or other pre-approved vendors.

Best For: Agencies with recurring low-dollar purchases (e.g., office supplies, admin services).

🔹 6. Government-Wide Acquisition Contracts (GWACs)

Definition: Pre-competed IDIQ contracts for technology solutions used by multiple federal agencies.

Examples:

  • GSA Alliant

  • CIO-SP3

  • SEWP V

🔹 7. Simplified Acquisition (FAR Part 13)

Definition: Used for smaller procurements under the Simplified Acquisition Threshold (SAT), currently $250,000.

Best For: Small businesses new to federal contracting or targeting micro-purchases.

🔹 8. Grants & Cooperative Agreements

Definition: Non-contractual funding for research, innovation, or public benefit projects. More collaborative and flexible.

Agencies: NIH, DOE, NSF, DOJ, etc.

📌 Which Contract Type Is Right for You?

Our team at Dynamic Contracts Consultants LLC helps you:

  • Understand risk profiles and pricing strategies

  • Match the right contract vehicle to your capabilities

  • Ensure compliance with contract-specific clauses (e.g., T&M audits, CPFF billing)

📞 Need Help Identifying or Managing a Federal Contract Type?

Let us help you analyze, pursue, and manage the best-fit contract vehicles for your business.

📧 info@dycconsultant.com
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