Contract Types


The Federal Government uses various types of contracts to meet their requirements. Contract types vary according to the degree and timing of the responsibility assumed by the contractor for the cost of performance and the amount and nature of the profit incentive offered to the contractor for achieving or exceeding specified standards or goals.

Cost-reimbursement types of contracts provide for payment of allowable incurred costs, to the extent prescribed in the contract. This type of contract places less risk on the contractor as payment will be made for all allowable incurred costs. Cost-reimbursement contracts are not generally used for commercial items.

The Government may also use Incentive Contracts, Indefinite Delivery Contracts, Time and Material (T&M) Contracts, Labor Hour Contracts, Letter Contracts, and Agreements.

Small requirements called micro-purchases may be met through the use of the Government Purchase Card (credit card).

Learn more through an overview on Contract Types used by the Federal Government.

Federal Government Contract Types is a multifaceted topic and businesses should know what type of contract the Government will be awarding.  For additional information on contract types, please contact our staff of experts at or 414-270-3600.