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Plain-language definitions of every Contract Types & Vehicles term that shows up in government contracting work.
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.
Read definitionA 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.
Read definitionA 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.
Read definitionA 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.
Read definitionA 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.
Read definitionA 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.
Read definitionA 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.
Read definitionA 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.
Read definitionCost-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.
Read definitionA 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.
Read definitionA 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.
Read definitionA 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.
Read definitionAn 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.
Read definitionA 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.
Read definitionA long-term governmentwide contract that lets agencies buy commercial products and services at pre-negotiated rates.
Read definitionAn 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.
Read definitionA flexible federal contract that lets agencies order an indefinite quantity of supplies or services over a set period.
Read definitionA 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.
Read definitionA letter contract is a preliminary written authorization allowing a contractor to begin work immediately while the parties continue negotiating the final definitive contract terms.
Read definitionA Multiple Award Contract awards the same IDIQ vehicle to several contractors simultaneously, who then compete against each other for individual task or delivery orders.
Read definitionAn 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.
Read definitionAn 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.
Read definitionOther 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.
Read definitionPerformance-Based Acquisition is the preferred acquisition approach for services, structuring solicitations and contracts around measurable outcomes rather than prescribed tasks or processes.
Read definitionA 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.
Read definitionA 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.
Read definitionA 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.
Read definitionA 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.
Read definitionA 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.
Read definitionAn 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.
Read definitionA 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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