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Contract Types & Vehicles

Plain-language definitions of every Contract Types & Vehicles term that shows up in government contracting work.


Contract Types & VehiclesBOA

Basic Ordering Agreement (BOA)

A Basic Ordering Agreement pre-establishes terms and conditions for future contracts between the government and a contractor, individual orders become separate contracts when placed.

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Contract Types & Vehicles

Bilateral Modification

A bilateral modification is a contract change signed by both the contracting officer and the contractor, reflecting mutual agreement on the changed terms, required for scope, price, or substantive changes.

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Contract Types & VehiclesBPA

Blanket Purchase Agreement (BPA)

A BPA is a simplified acquisition mechanism that pre-establishes terms and pricing with one or more vendors for repeated purchases, eliminating the need for a new contract action each time.

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Contract Types & Vehicles

Bridge Contract

A bridge contract is a short-term contract extension awarded to an incumbent contractor to maintain continuity of service while a new follow-on contract is competed or awarded.

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Contract Types & Vehicles

Contract Modification

A contract modification is any written change to a contract's terms, including scope, price, schedule, or clauses, executed by the contracting officer with or without the contractor's agreement.

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Contract Types & VehiclesCPAF

Cost-Plus Award Fee Contract (CPAF)

A Cost-Plus Award Fee contract reimburses allowable costs and adds a discretionary award fee based on the government's subjective evaluation of the contractor's overall performance quality.

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Contract Types & VehiclesCPFF

Cost-Plus Fixed-Fee Contract (CPFF)

A Cost-Plus Fixed-Fee contract reimburses all allowable contractor costs plus a fixed dollar fee that does not change based on actual costs, used for R&D and uncertain-scope work.

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Contract Types & VehiclesCPIF

Cost-Plus Incentive Fee Contract (CPIF)

A Cost-Plus Incentive Fee contract reimburses all allowable costs and adjusts the contractor's fee up or down based on cost performance against a target, incentivizing cost efficiency.

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Contract Types & VehiclesCPPC

Cost-Plus Percentage of Cost (CPPC)

Cost-Plus Percentage of Cost is a prohibited contract type where the contractor's fee increases as costs increase, creating a perverse incentive to inflate costs and driving up government spending.

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Contract Types & Vehicles

Delivery Order

A delivery order is a contract action placed against an IDIQ or supply contract specifying the quantity, delivery date, and destination for a specific supply requirement.

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Contract Types & VehiclesFFP

Firm Fixed-Price Contract (FFP)

A Firm Fixed-Price contract sets a single price that does not change regardless of contractor costs, placing maximum performance risk on the contractor and maximum price certainty on the government.

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Contract Types & VehiclesFPIF

Fixed-Price Incentive Fee Contract (FPIF)

A Fixed-Price Incentive Fee contract sets a target cost and profit with a ceiling price, allowing both parties to share cost savings or overruns, incentivizing contractor cost control.

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Contract Types & VehiclesFP-EPA

Fixed-Price with Economic Price Adjustment (FP-EPA)

An FP-EPA contract starts at a fixed price but includes a contractual mechanism to adjust that price based on specified economic changes, such as wage escalation or commodity price indices.

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Contract Types & Vehicles

Follow-On Contract

A follow-on contract is a new contract awarded for the same or similar requirement after an existing contract expires, typically competed among new and incumbent contractors for the successor work.

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Contract Types & VehiclesGSA MAS

GSA Schedule (Multiple Award Schedule)

A long-term governmentwide contract that lets agencies buy commercial products and services at pre-negotiated rates.

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Contract Types & VehiclesIDDQ

Indefinite Delivery Definite Quantity Contract (IDDQ)

An IDDQ contract obligates the government to order a fixed, definite quantity of supplies or services at specified prices, with delivery schedules established over the contract period.

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Contract Types & VehiclesIDIQ

Indefinite Delivery, Indefinite Quantity (IDIQ) Contract

A flexible federal contract that lets agencies order an indefinite quantity of supplies or services over a set period.

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Contract Types & Vehicles

Labor Hour Contract

A Labor Hour contract pays fixed hourly rates per labor category for actual hours worked, identical to a Time and Materials contract but without any provision for materials reimbursement.

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Contract Types & Vehicles

Letter Contract

A letter contract is a preliminary written authorization allowing a contractor to begin work immediately while the parties continue negotiating the final definitive contract terms.

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Contract Types & VehiclesMAC

Multiple Award Contract (MAC)

A Multiple Award Contract awards the same IDIQ vehicle to several contractors simultaneously, who then compete against each other for individual task or delivery orders.

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Contract Types & Vehicles

Option Period

An option period is any contractual extension right the government may unilaterally exercise at pre-negotiated terms, including options of any duration, not just annual option years.

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Contract Types & Vehicles

Option Year

An option year is a unilateral right allowing the government to extend an existing contract for an additional period at pre-negotiated prices without a new competition.

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Contract Types & VehiclesOTA

Other Transaction Authority (OTA)

Other Transaction Authority allows defense agencies to enter agreements for prototype projects and follow-on production outside the FAR, enabling faster and more flexible acquisition of innovative technology.

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Contract Types & VehiclesPBA

Performance-Based Acquisition (PBA)

Performance-Based Acquisition is the preferred acquisition approach for services, structuring solicitations and contracts around measurable outcomes rather than prescribed tasks or processes.

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Contract Types & Vehicles

Performance-Based Contract

A performance-based contract defines what results must be achieved rather than how to achieve them, using measurable standards and quality assurance surveillance to evaluate contractor success.

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Contract Types & Vehicles

Requirements Contract

A Requirements contract obligates the government to purchase all of its actual requirements for specified supplies or services exclusively from the contractor during the contract period.

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Contract Types & Vehicles

Single Award Contract

A single award contract is an IDIQ awarded to one contractor who becomes the exclusive source for all orders under the vehicle during the contract period.

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Contract Types & Vehicles

Task Order

A task order is an individual contract action placed against an IDIQ or contract vehicle, defining a specific scope, period of performance, and price for a defined set of services.

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Contract Types & VehiclesT&M

Time and Materials Contract (T&M)

A Time and Materials contract pays contractors a fixed hourly rate per labor category plus the actual cost of materials, used when scope is undefined and appropriate only with government oversight.

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Contract Types & VehiclesUCA

Undefinitized Contract Action (UCA)

An Undefinitized Contract Action authorizes a contractor to begin performance before contract price and terms are fully negotiated, used when urgency prevents definitization before work must start.

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Contract Types & Vehicles

Unilateral Modification

A unilateral modification is a contract change signed only by the contracting officer, used for issuing change orders, exercising options, and making administrative updates without contractor agreement.

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