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Comparison of Major Contract Types

Emptor Cautus

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Remember the old TV commercials for toys that began, “Be the first on your block . . . ,” and then inserted the name of some new toy, doll, gun or game? Well, you can forget about that in this case. For those of you who have not already done so, I’m recommending that you consider downloading a document that has already been downloaded more than fifty thousand times since published on the web, and nearly four thousand times since it was last updated in January 2014. [As of today, the precise numbers were 52440 for Lifetime Activity and 3786 for Activity for the Last 90 Days. This is a very popular page, listed as “Popularity of this page: #1 of 85 items.”] The document I’m referring to is a chart entitled “Comparison of Major Contract Types,” published by the Defense Systems Management College (DSMC), which is a part of the Defense Acquisition University (DAU).

The Chart can be found on Defense Acquisition University (DAU) Acquisition Community Connection (ACC) Contract Cost, Price & Finance website at:

https://acc.dau.mil/CommunityBrowser.aspx?id=214513

Use that link, as older versions of the chart can be found in many, many places. You'll want the most current version.

As described on the Defense Acquisition University (DAU) Acquisition Community Connection (ACC) Contract Cost, Price & Finance webpage:

The Comparison of Major Contract Types Chart is based on the information in the Contract Pricing Reference Guides (Volume 4 – Advanced Issues in Contract Pricing, Chapter 1 - Establishing And Monitoring Contract Type), and updated for statutory/regulatory/policy changes and court decisions that have not been included in the Guides. On the reverse side of the Chart is additional information on contract types and incentives used in Defense Systems Management College (DSMC) courses at the Defense Acquisition University (DAU).

Now, that description tells you what is on the reverse, but not what is on the obverse (i.e., the front). For those of you who like to do on-line shopping, and check those little boxes so that you can do product comparison, this is just the thing. You have all the information you need for comparison in one small document. Well, small, if you consider 11 x 17 to be small. The first row across the top of the Chart lists the ten contract types to be compared (i.e., Firm-Fixed-Price (FFP), Fixed-Price Economic Price Adjustment (FPEPA), Fixed-Price Incentive Firm Target (FPIF), Fixed-Price Award-Fee (FPAF), Fixed-Price Prospective Price Redetermination (FP3R), Cost-Plus-Incentive-Fee (CPIF), Cost-Plus-Award-Fee (CPAF), Cost-Plus-Fixed-Fee (CPFF), Cost or Cost-Sharing (C or CS), and Time & Materials (T&M)). The first column down the left hand side of the Chart describes the seven items of information to be compared (i.e., Principal Risk to be Mitigated, Use When . . ., Elements , Contractor is Obliged to:, Contractor Incentive, Typical Application, and Principal Limitations in FAR/DFARS Parts 16, 32, 35, and 52).

The Chart is not new. I did a quick check through some files in what I laughingly refer to as my office, and found a copy dated NOV 84, almost 30 years ago. I decided not to look for an older version, as it might make me concerned about my age. Back then it was called “Types of Contracts.” The older version only compared four items of information (i.e., Description, Elements, Application, and Limitations). That Chart doesn’t say so, but I suspect the information came from the Armed Services Pricing Manual (ASPM) Vol.1. DoD, 1986, as the Contract Pricing Reference Guides didn’t exist back then.

The current version of the Charts dates back to 2008, when it was revamped, and published electronically. The Chart is updated, but not periodically, only when changes to the Federal Acquisition Regulation (FAR) or the Defense Federal Acquisition Regulation Supplement (DFARS) render content outdated. For example, the Chart was not updated in 2009, but was updated twice in 2013. [it could have been three time in 2013, as the change that drove the January 2014 version occurred in December 2013.] You need to check back from time to time to see whether a new version of the Chart has been posted.

There are two files on the website that you can download, VIEW and PRINT. You may need to download the latter, depending on the capabilities of your duplex printer. Of course, that presumes you have a duplex printer.

So, maybe you can’t be the first on your block, this time, but don’t be the last.



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I had said that I wasn't going to look for an older version of the Chart, and I kept my word. However, while searching for a vintage document on multi-year contracting, I stumbled across an older version, June 1977. That particular version, Types of Contracts (A Comparison and Summary), was published by the Department of Procurement and Production, Air Force Institute of Technology (AFIT). In addition to contract types, there are "Other Contractual Devices (Special Uses)," which includes Letter Contracts and Indefinite Delivery. On this Chart, there are four rows of information (i.e., Application and Essential Elements, Limitations, Suitability, ASPR). [Note: For those of you not old enough to remember the ASPR, it was (is) the Armed Services Procurement Regulation. For those of us in the Department of Defense back then, it is what we had before the FAR and the DFARS, it is what we had before their predecessor, the Defense Acquisition Regulation (DAR), it was the reason that we created our contract file documentation: "To cover your ASPR."]

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I remember this chart. It was given out as a handout in CON 101. I kept it hanging up in my cubicle for years until I moved out of operational contracting. There was another chart that used to be given out to newbies that showed the difference between provisions and clauses that was also quite helpful. Hmmm, time to check my "office". Excellent tool for newbies and those of us who like to keep the cobwebs at bay.

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