Question

The acquisition team has been able to clearly and specifically define the requirements, providing precise specifications that allow offerors to plan for the exact costs of theacquisition. Which type of contract should be used?

Answer 1

A Fixed-Price Contract is suitable when acquisition requirements are clearly defined, allowing for exact cost planning. It offers cost stability and limits risk of cost escalation.

Step-by-step explanation:

When an acquisition team has been able to clearly and specifically define the requirements with precise specifications, enabling offerors to plan for the exact costs of the acquisition, the most appropriate type of contract to use is a Fixed-Price Contract. This contract type provides stability for both the buyer and the seller, as the cost is agreed upon upfront and is not subject to change unless the scope of work also changes. The procurement process benefits from such contracts as they limit the risk of cost escalations and ensure that vendors are bidding on the same scope of work, thus enhancing fairness in the acquisition process.