How should contract type be determined in a Part 15 award?

• A. Based on the fastest procurement timeline.
• B. Based on the offeror's preference alone.
• C. Based on risk to performance, with preference for fixed-price when possible and cost-reimbursement when necessary to manage risk.
• D. Based on the smallest price submitted.

Answer: (C)

The important idea is to determine contract type based on risk to performance, balancing government protection with contractor incentives. If the requirements are well defined and the risk of cost growth or performance problems is low, a fixed-price contract is preferred because it provides price certainty and motivates the contractor to control costs. When the risk is high or uncertain—where costs could vary or performance outcomes are not predictable—a cost-reimbursement contract is used to cover allowable costs and ensure the government—or the project—can proceed without risking inadequate performance, with protections like a reasonableness of costs and potential limits.

The other options miss this core approach. Choosing contract type to speed up procurement ignores risk and price dynamics. Letting the contractor’s preference alone drive the type undermines the government’s need to manage risk. Selecting the smallest price ignores the underlying risk and cost uncertainty that may require a different contract form to ensure successful performance.