As the world’s single biggest buyer of goods and services, the federal government has many ways to structure its procurements. Different situations and conditions often determine the best vehicle for a particular purchase. But choosing the right type of contract for a good or service is not always easy. Contracting officers for the buying agencies must assess a wide range of factors to determine what contract type will provide the government with the best value and the least risk.

The following is excerpted from Daniel Oyer's book "Pricing and Cost Accounting: A Handbook for Government Contractors, Second Edition."

In preparing to negotiate reasonable contract prices, contractors will need to estimate costs. These cost estimates must be developed using good techniques and, when available, sound historical data. In addition, contractors must comply with unique government rules and regulations.

It is cheaper to stay out of trouble than to get out of trouble.  

In each of the last two years, December has brought big changes to procurement ethics. In December 2007, the FAR Council added a policy encouraging all contractors, big and small, to adopt codes of business conduct, internal controls and ethics training programs. In December 2008, the FAR Council added to this ethics policy an ethics “self-disclosure” requirement and more “internal control” requirements. With all these new rules, described in over 40,000 words of Federal Register fine print, there is a lot of confusion about what is required of contractors. 

Note: This material is excerpted from "Federal Contracting Made Easy, Third Edition" by Scott. A. Stanberry (2009). Click here for more information.