THE PROCUREMENT SPECTRUM

General Features
PHASE R&D - Analyze Alternatives - Develop Concepts and Technologies Develop and Demonstrate Systems - Provide Services - Low Rate Production and Deployment Full Rate Production and Deployment Sustainment - Maintenance - Enhancement
Type of Contract Usually:
Cost Plus Fixed Fee (CPFF)
see note 1

Time & Materials T&M)
see note 2

 Various;
usually:
CPFF,

T&M,

Cost Plus Incentive Fee (CPIF)
see note 3,

Cost Plus Award Fee (CPAF)
see note 4

Occasionally:
Fixed Price Indefinite Delivery, Indefinite Quantity (FPIDIQ)
see note 5

Usually:
Firm Fixed Price (FFP)
see note 6

Occasionally:
Fixed Price Incentive (FPI)
see note 7

FPIDIQ

Various; usually:
FPIDIQ

Occasionally:
CPFF
FPI
FFP

Method of Procurement Usually:
Request For Quotation (RFQ)
see note 8

Request For Proposal (RFP)
see note 9

Usually:
RFP

Occasionally:
2-Step-Formal Advertising
see note 10

Usually:
Invitation For Bids (IFB)
see note 11

Occasionally:
2-Step-Formal Advertising

RFP

Usually:
IFB
RFP

Occasionally:
2-Step-Formal Advertising

Cost Risk none none - minimal Highest high
Performance Risk Highest minimal - high none low
Technical Direction Extensive some none without a Change Order various
Audit Exposure
see note 12 		CPFF
T&M 		CPFF
T&M
CPIF		 none, except for price redetermination or fraud various, depending on contract type
Reporting Requirments
 Cost - Progress - Predictive - Other CPFF
Cost - Progress - Predictive - Other		 Progress - Cost, if necessary to support Progress Payment vouchers various, depending on contract type

NOTES
1Cost Plus Fixed Fee (CPFF) - All costs of performance are reimbursed, plus a Fixed ($) Fee is paid - proportionate to costs incurred (normal), to performance completed (occasionally) or upon completion (rare)

2Time & Materials (T&M) - Reimbursement for labor at pre-negotiated composite (direct cost + indirect cost + fee) rates, and for materials at actual cost

3Cost Plus Incentive Fee (CPIF) - Similar to CPFF, except that some or all of the fee is based upon meeting objective contract incentives (cost, performance or delivery)

4Cost Plus Award Fee (CPAF) - A form of incentive contract similar to CPIF, except that determination of achievement of goals and amount of fee is subjective (made by an Award Fee Board)

5Fixed Price Indefinite Delivery, Indefinite Quantity (FPIDIQ) - Fixed unit prices, paid upon delivery/completion of each unit

6Firm Fixed Price (FFP) - A lump sum to be paid upon satisfactory performance (completion). Progress Payments (based on costs incurred + a portion of the negotiated profit) are commonly paid during performance

7Fixed Price Incentive - A fixed price is paid upon delivery/completion, plus an incentive payment is made based upon meeting performance or delivery goals

8Request For Quotation (RFQ) - A solicitation for quotes. Commonly used under simplified acquisition procedures, requesting only quotations on identified products or labor rates

9Request For Proposal (RFP) - A solicitation for offers under negotiation procedures. Commonly requires detailed technical & cost proposals in response to a Statement of Work (SOW) or schedule of Contract Line Items (CLINs)

102-Step-Formal Advertising - Requiring technical proposals only in 1st step, field is narrowed to a technical competitive range, the members of which are asked for price (usually FFP)

11Invitation For Bids (IFB) - A solicitation requiring only a bona fide price for delivery

12Audit:

CPFF - Post-performance audit (may be a sample or a complete, depending upon program size, complexity and Contracting Officer's requirements) verifies costs (direct and indirect) & justifies payment of fee
T&M - Post performance audit (usually a sample) verifies labor hours spent and costs of materials
CPIF - Similar to CPFF, but also verifies/confirms achievement of incentive requirements