Contract confusion

A little fuzzy on the distinctions between various types of federal contracts?

Don’t feel bad, because some federal contracting officers are, too, according to a Federal Register notice published today.

In a jointly filed proposed rule, the Defense Department, NASA and the General Services Administration indicate that they are trying to correct the mistaken impression among contracting officers “governmentwide” that the fixed labor rates in time-and-materials/labor-hour contracts make them “fixed-price type contracts.”

In fact, as the Government Accountability Office reported last year, time and materials contracts are considered high-risk because the contractor’s profit hinges on the number of hours worked.