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Types of Contracts

Term Definition
Blanket Purchase A pre-contractual agreement with a vendor which allows an agency to make small purchases by issuing a purchase order for each individual purchase.
Competitive Sealed Bidding (IFB) A method of contracting that, through an “Invitation for Bids”, solicits the submission of competitive bids, followed by a public opening of the bids. A contract is then awarded to the responsible bidder who submitted the lowest priced responsive bid.
Competitive Sealed Proposals (RFP) A process which includes the submission of written technical and price proposals from one or more offerors and a written evaluation of each proposal in accordance with evaluation criteria set forth in the Request for Proposals. These criteria consider price, quality of the items, past performance, and other relevant factors.
Cost-Plus-Award-Fee Contract A cost-reimbursement type contract which provides for a fee consisting of an amount fixed at the beginning of the contract and potential award of additional fee amounts based upon a judgmental evaluation by the contracting officer, sufficient to provide motivation for excellence in contract performance.
Cost-Plus-Fixed-Fee Contract A cost-reimbursement type contract which provides for the payment of a fixed fee to the contractor. The fixed fee, once negotiated, does not vary with actual cost, but may be adjusted as a result of any subsequent changes in the work or services to be performed under the contract.
Cost-Plus-Incentive-Fee Contract A type of contract that specifies a target cost, a target fee, minimum and maximum fees, and a fee adjustment formula.
Cost-Reimbursement Contract A contract under which the District reimburses the contractor for those contract costs, within a stated ceiling, which are recognized as allowable and allocated in accordance with cost principles, and a fee, if any.
Definite-Quantity Contract A contract that provides for delivery of a definite quantity of specific supplies or services for a fixed period, with deliveries to be scheduled at designated locations.
Definitive Contract The contract executed pursuant to letter contract commitment.
Firm-Fixed Price Contract A contract where the price is not subject to any adjustment on the basis of the contractor’s cost experience in performing the contract. This type of contract places maximum risk and full responsibility for all costs and resulting profit or loss upon the contractor, and provides maximum incentive for the contractor to control cost and perform effectively.
Fixed-Price Contract with Economic Price Adjustment A fixed-price type contract that provides for the upward and downward revision of the stated contract price upon the occurrence of certain contingencies that are specifically defined in the contract.


Term Definition
Fixed-Price Incentive Contract A fixed-price type contract that provides for adjusting profit, and subject to a ceiling, establishes the final contract price by a formula based on the relationship of final negotiated price to total target cost. After performance of the contract, the final cost is negotiated and the final contract price is then established in accordance with the formula.
Incentive Contract A fixed-price or cost-reimbursement type contract which provides for relating the amount of profit or fee payable under the contract with the contractor’s performance in order to obtain specific procurement objectives.
Indefinite-Quantity Contract A contract that provides for an indefinite quantity, within written stated limits, of specific supplies or services to be furnished during a fixed period, with deliveries to be scheduled by placing orders with the contractor. The contract requires the District to order and the contractor to furnish at least a stated minimum of supplies or services.
Invitation for Bids (IFBs) A solicitation used to request price offers for goods, services and construction under competitive sealed bidding procedures.
Multiple Award Schedule A contract made with more than one (1) supplier for comparable supplies and services at varying prices for delivery within the same geographic area.
Multi-Year Contract A contract for a period longer than twelve months.
Request for Information (RFI) A request for information is used when the District does not presently intend to award a contract, but needs to obtain price, delivery, other market information, or capabilities for planning purposes. Responses to requests for information notices are not offers and cannot be accepted by the District to form a binding contract.
Request for Quotation (RFQ) A solicitation document used in simplified acquisitions to communicate District requirements to prospective contractors.
Request for Proposal (RFP) A solicitation document used in a competitive sealed proposal method of procurement, to communicate the District’s requirements to prospective offerors, when the use of competitive sealed bidding is not practical, and the award will be based on both price and non-price evaluation factors specified in the solicitation.
Single Award Schedule A contract made with one (1) supplier at a stated price for specific items and for delivery to a geographic area defined in the schedule.