These different elements are important, because they make it difficult for the federal government to adjustment to large scale projects. This is problematic, because it means that inevitable cost overruns and delays will occur (despite using these agreements to deal with these issues). (Carr, 2004)
Discuss which element(s) of cost-reimbursement contracts tend to produce the biggest troubles for contractors and why.
The biggest elements that are giving contractors the largest challenges with reimbursement agreements are the lack of flexibility they have. Like with the federal government, contractors have to work within the overall scope of the accord. During the course of various projects, this can often lead to cost overruns. The reason why, is because the contractor must issue new agreements to: cover additional costs or changes to the underlying work. Once this occurs, it means that it is only a matter of time until there will be delays and costs will begin to soar. (Carr, 2004)
Select one other contract type (neither fixed-price nor cost-reimbursement) and explain its pros and cons from the perspective of the federal government.
Another type of agreement that could be utilized is: the fixed price with economic price adjustment contract. This is when the federal government will allow for sealed bidding to take place. However, there are provisions inside the agreement that will compensate for increases based upon changes in economic conditions (such as: rising costs for raw materials). This is important, because it shows how this type of agreement is designed to provide increased amounts of flexibility during the process. (Manuel, 2010, pp. 3 -- 6)
The advantage of using these kinds of contracts (from the viewpoint of the federal government) is that it is providing increased amounts of flexibility. This is significant, because it will allow federal officials to use this as way to: find the lowest costs possible with the greatest benefits....
While at the same time, they are able to adjust to changes that are taking place from various economic events. This will help the project to be completed in timeline of the estimate and within the costs of contract. (Manuel, 2010, pp. 3 -- 6)
The biggest drawback of using this kind of accord is that the risks are un-proportionately balanced. This means that when something happens that could have an impact on the time table or there are possible legal challenges (i.e., lawsuits). The federal government could face tremendous cost overruns that will affect the viability of the project. This is because they do not have the ability, to make any kind changes to these agreements beyond the scope of economic factors. (Manuel, 2010, pp. 3 -- 6)
Clearly, there are wide variety of advantages and drawbacks associated with the various contracts that have been discussed. These elements are important, because they are showing how the process is designed to increase transparency and reduce costs. Yet, beneath the surface all of the different agreements have a number of drawbacks that will affect contractors and the federal government. Therefore, there needs to be some kind of reform that must be implemented to provide both sides with increased amounts of flexibility. This will prevent cost overruns and delays in a host of different projects.
Bibliography
Federal Contract Awards. (2009). Fed Spending. Retrieved from: http://www.fedspending.org/fpds/tables.php?tabtype=t1&rowtype=f&subtype=a&sorttype=tot
Environmental Management. (2005). Department of Energy. Retrieved from: http://www.em.doe.gov/PDFs/EMAB_Contract_Strategy_and_Mgmt_Presentation_092905.pdf
Carr, A. (2004). Federal Contracts and Assistance Relationships. Public Law Research Institute. Retrieved from: http://uchastings.edu/public-law/plri/spring95/basefund.html
Manuel, K. (2010). Contract Types. Washington DC: U.S. Government Printing Office.
