With the Government’s policy to restrict use of “high risk” contracts, many instances exist where the best suited contract types are not utilized. This includes cost reimbursement and time and material (T&M)/labor hour (LH) types. It is especially evident in IT development projects. In many cases such as when using Agile, T&M/LH makes sense and the insistence on fixed price either drives up cost unnecessarily and/or creates a contract that isn’t responsive to the agency needs. The solution is a simple policy focus to allow government Contracting Officers the latitude to decide on the most appropriate contract type based upon the unique circumstances. Contracting Officers should have the discretion to consider various contract strategies and methodologies and document their decisions without having to go through special reviews and approvals.
Idea No. 103