Small Business MBA

US Government Contracts

Types and Uses and Pros and Cons

The US Government Uses Multiple Types of Contracts to Buy and Sell from Small Business [Photo by MIKE STOLL on Unsplash]

The procurement procedures used by the United States government encompass an array of contract types, each fashioned to fulfill a unique need within the framework of federal acquisition. Defined and administered by the Federal Acquisition Regulation (FAR), these contracts delineate the manner in which the government engages in commercial exchanges with various public and private entities. The Defense Acquisition University (DAU) offers a comprehensive understanding of the specifics of these contract types and the operational contexts in which they are applied.

RFP Process

We will take a look at the 3 principal types of U.S. government contracts — Firm Fixed Price (FFP), Time and Materials (T&M), Cost Plus Fixed Fee (CPFF), in addition to other niche contracting forms. Each contract type will be detailed in terms of its operational structure, the category of goods or services typically procured, the potential advantages and disadvantages, and the prospective risks that contractors may encounter in their interactions…