Firm-fixed-price, level-of-effort term contracts
Subject: Types of Contracts
Source: FARProperty "Source" has a restricted application area and cannot be used as annotation property by a user.
FAR Part: FAR 16
DFAR Part:
Description[1]
A firm-fixed-price, level-of-effort term contract requires—
(a) The contractor to provide a specified level of effort, over a stated period of time, on work that can be stated only in general terms; and
(b) The Government to pay the contractor a fixed dollar amount.
Application
A firm-fixed-price, level-of-effort term contract is suitable for investigation or study in a specific research and development area. The product of the contract is usually a report showing the results achieved through application of the required level of effort. However, payment is based on the effort expended rather than on the results achieved.
16.207-3 Limitations
This contract type may be used only when—
(a) The work required cannot otherwise be clearly defined;
(b) The required level of effort is identified and agreed upon in advance;
(c) There is reasonable assurance that the intended result cannot be achieved by expending less than the stipulated effort; and
(d) The contract price is $150,000 or less, unless approved by the chief of the contracting office.
References
- ↑ FAR 16.207-1; March 17, 2015