Not all government contracts work the same way. Understanding the contract 'vehicle' and pricing type tells you how much risk you carry, how you'll get paid, and how to price your bid.
Pricing arrangements
| Type | How it works | Who carries the risk |
|---|---|---|
| Firm-Fixed-Price (FFP) | One agreed price regardless of your actual cost to deliver. | Contractor — profit if you're efficient, loss if you're not. |
| Cost-Reimbursement (CPFF/CPIF) | Government reimburses allowable costs plus a fee. | Government — used for R&D or uncertain-scope work. |
| Time & Materials (T&M) / Labor Hour | Paid by the hour at fixed labor rates plus materials. | Shared — common for staffing/services contracts. |
Contract vehicles
- Definitive contract — a single, standalone award for specific work.
- IDIQ (Indefinite Delivery/Indefinite Quantity) — an umbrella contract; specific work is issued later as 'task orders' or 'delivery orders.'
- GWAC (Government-Wide Acquisition Contract) — a pre-competed IDIQ any federal agency can use (e.g., GSA STARS III, NASA SEWP).
- BPA (Blanket Purchase Agreement) — a simplified ordering agreement, often used with GSA Schedule holders.
- GSA Multiple Award Schedule (MAS) — a pre-negotiated catalog contract letting agencies buy from you without a full new competition.
The acquisition lifecycle (the path an opportunity travels)
- Market research / Sources Sought / RFI (Request for Information) — agency gauges who can do the work.
- Solicitation released — RFP (Request for Proposal), RFQ (Request for Quote), or IFB (Invitation for Bid).
- Proposals submitted by the deadline.
- Evaluation — technical, past performance, and price are scored per the solicitation's evaluation criteria.
- Award — a Contracting Officer signs the contract with the winning offeror(s).
- Protest window — losing bidders may challenge the award (via the agency, GAO, or Court of Federal Claims).
- Contract performance, invoicing, and closeout.
PRO TIP — Pro tip
Sources Sought notices and RFIs are where the deal is often quietly shaped before the RFP is even written. Responding to these — even when you can't yet bid — builds relationships and can influence requirements in your favor.