The advantages of the basic ordering agreements also rely on the fact that they allow to agree on prices and quantities of products and services that are not established when the agreement is made. But in such situations it is expected that the government is likely to purchase these products and services and the contractors agree on providing them when they are required by the government.

However, there are also certain disadvantages associated with these agreements. These disadvantages refer to the fact that in certain situations the costs associated with these contracts cannot be anticipated. This makes it difficult for the government to establish the level of resources that can be attributed to these purchases....

It is important to establish the costs of the contracts in accordance with the production costs of the providers.
Reference list:

1. Symes, S. (2012). Advantages and Disadvantages of a Fixed Price Contract. Retrieved June 9, 2012 from http://smallbusiness.chron.com/advantages-disadvantages-fixedprice-contract-21066.html.

2. Basic Ordering Agreement (2012). Business Dictionary. Retrieved June 9, 2012 from http://www.businessdictionary.com/definition/basic-ordering-agreement.html.

3. Philpott, D. & Cook, S. (2012). Managing Cost Reimbursable Contracts. Government Training Inc. Retrieved June 9, 2012 from http://governmenttraininginc.com/pdfs/Cost-Reimbursable-TOC-Excerpt.pdf.