The government offers and provides billions of dollars to contractors. The contracts offered by the government can be profitable but contracting is a complicated profession. Here are the types of government contracts you might learn while doing online government contracting courses.
The contract Based on Fixed Price
These are the simplest forms in all contract types that allow freedom and flexibility to contractors. They provide owners with a bit of certainty. In fixed-price contracts, you pay a set rate and get the specified services. With fixed-rate contracts, the governments ask for some specific requirements and items. The agency sets out the price they will pay for the particular service
In a fixed-priced contract agreement, a predetermined value does not change till the end of the project regardless of the time spent on the job or material being bought.
The contract format is acceptable for simple projects. If the owners know what they want, then the contractor focuses on a detailed set of plans.
Cost Reimbursable Contracts
Unlike the fixed price contracts in which the risk is more on the contractor, in reimbursable cost contractors, the risk falls on the government agency. The administration contracts require intensive research, and they are research and development contracts rather than contracts with services and goods.
This contract is mostly used for research projects, construction, and other undertakings that involve needing to purchase materials. Because the price of these materials is unidentified when the contract is written, most of the time the contractor is paid a fee on top of the materials cost.
These contracts are the best when project flexibility is needed like the scope of work is not clear, or the project is at high risk.
Time & Materials Contracts
One of the most common contracts in the construction field is time and material contracts. In this contract, the contractor is paid for the material they will use as the amount of time spent in completing the job. This constriction project can cost more than what is anticipated.
The things included in this contract are hourly rates and material mark-ups. These contracts are usually short-term, such as for emergency services.
This contract is a sub-segment of a fixed price contract in which there is a specific cost and time commitment desired for the project. This contract allows a fixed price to be paid for the work that is completed before a deadline at some cost. There are many categories in a construction contracts that you can learn from online government contracting courses if you want to become a government contractor.