Contract Principles and Planning
Framework and planning
Contracting begins with the FAR system and the principle that the government buys only what it needs, when it needs it, using the right appropriation. Candidates should know competition requirements (full and open competition, the limited exceptions, and the J&A process), market research, acquisition planning, and the requirement that specifications be stated functionally where practical. Fiscal-law concepts are heavily tested: the purpose statute, the bona fide need rule, the Antideficiency Act, and the time, matter, and amount tests. Distinguish severable services (ongoing, divisible) from nonseverable services (a single undertaking); the bona fide need for severable services may permit a limited crossover of fiscal years, but that is not a general license to stockpile funds.
Contract type selection is risk allocation. Firm-fixed-price fits well-defined requirements and stable performance; cost-reimbursement fits uncertain development work but requires adequate contractor accounting and government surveillance. Incentive and award-fee arrangements sit between them. A common trap is treating contract type as a label rather than a risk decision, or assuming the lowest-price type is always preferred.
Rule of thumb / worked example: if the statement of work is a one-time, well-understood service and the contractor can control cost, choose FFP and evaluate price; if the work is research with unknown technical risk and the contractor's accounting system is adequate, consider cost-plus-fixed-fee and evaluate cost realism. Always test the appropriation against bona fide need before funding a crossover.