Contract Formation and Types Flashcards

What is the primary purpose of a letter contract or undefinitized contract action (UCA)?

Answer: To authorize work to begin before final price negotiation is complete

UCAs allow work to start immediately when urgency demands it, with the understanding that the final terms will be definitized within a specified period.

Under US federal contracting, which FAR part primarily governs contract types?

Answer: FAR Part 16

FAR Part 16 covers contract types, including policies for selecting appropriate contract types and descriptions of each type.

A Basic Ordering Agreement (BOA) is best described as:

Answer: A written instrument establishing terms for future orders but not itself a contract

A BOA pre-establishes terms and conditions to speed future contracting but does not itself commit either party to buy or sell any specific quantity.

Which statement about requirements contracts is most accurate?

Answer: They obligate the government to purchase all actual requirements from the contractor

A requirements contract obligates the government to order all its actual requirements for specified supplies or services from the contractor during the contract period.

What distinguishes a unilateral contract modification from a bilateral one?

Answer: Unilateral modifications are signed only by the contracting officer

A unilateral modification (SF 30, Block 13, 'A') is signed only by the contracting officer using a contract clause authority such as the Changes clause.

Which contract type provides the contractor an incentive fee based on achieving target cost and performance objectives?

Answer: Fixed-Price Incentive (Firm Target)

A Fixed-Price Incentive (Firm Target) contract establishes a target cost, target profit, and ceiling price with a sharing ratio that adjusts profit based on final cost.