Select the appropriate contract type to ensure you are properly allocating risk to each party.
“To an IDIQ program manager, all acquisitions look like a task order.” But there are a variety of acquisition paths – use consideration in selecting the best one.
Jaime Gracia commented
Not only is it important to match contract type to risk and requirements, but match contract management to type as well. How many times have we seen a FFP contract, especially "performance-based", be managed as a T&M with ceilings for hours and prescribed labor-rates? Eliminates the flexibility and the innovative solutions that the government intended in the first place.
This is at least party about assuming and assigning risk. It subborns true collaboraiton and partnership by trading risk for cost.
Noah Nason III commented
FFP contracts are doomed to failure when requirements are not specifically known. Yet contracting officers push FFP as it is easy on them and low risk for them (low risk as they can push responsibility for failure to the functional IT staff.) For example, I have seen several FFP contracts for over $4M where there first task was to write the functional description. The actual description of work was two typed pages. This was done despite the objections of the IT staff. The contracts were done well but were way over budget and extremely stress full with lots of time wasted in back and forth negotiations. NASA HQs got it right with a CPAF structure with an excellent performance measurement plan. When you put the contractor’s entire profit at risk and have a good way to determine the award fee you get good services with less stress.
Cindy Brockwell commented
I am finding of late that agencies are using PWS with minimal metrics to check the box on Performance based and often FFP contracts. This isn't meaningful to the government in managing the contract to a negotiated set of "real" metrics....mostly they are arbitraily assigned or the contractor is asked to assign them based on their experience...if they don't have experience with this agency, this isn't possible.