16.102
Policies
FAR 16.102 mandates careful selection of contract types, prohibits cost-plus-a-percentage-of-cost contracts, and requires proper documentation before award to ensure compliance and protect government interests.
Overview
FAR 16.102 outlines the policies governing the selection and use of contract types in federal acquisitions. It establishes which contract types are permitted under different procurement methods, prohibits certain contract structures, and sets requirements for necessary documentation before contract award. The section aims to ensure that contract types are chosen to best serve the Government’s interests while maintaining compliance with statutory and regulatory restrictions.
Key Rules
- Sealed Bidding Contracts
- Must use firm-fixed-price or fixed-price with economic price adjustment contract types.
- Negotiated Contracts
- May use any contract type or combination that promotes the Government’s interest, unless restricted by regulation or statute. Only contract types described in the FAR may be used unless a deviation is approved.
- Prohibition on Cost-Plus-a-Percentage-of-Cost
- This contract type is strictly prohibited for both prime contracts and subcontracts. Contracts must include clauses to enforce this prohibition.
- Determinations and Findings (D&F’s)
- Required D&F’s must be executed before contract award, and must meet the minimum content requirements specified in FAR 1.704.
Responsibilities
- Contracting Officers: Ensure proper contract type selection, prohibit cost-plus-a-percentage-of-cost arrangements, include required clauses, and execute all necessary D&F’s before award.
- Contractors: Comply with contract type restrictions and avoid prohibited subcontracting arrangements.
- Agencies: Oversee compliance with contract type policies and documentation requirements.
Practical Implications
- This section ensures contract types are selected to protect the Government’s interests and comply with legal requirements.
- Improper contract type selection or failure to execute required D&F’s can result in noncompliance and potential contract invalidation.
- Contractors and contracting officers must be vigilant about prohibited contract structures and required documentation.