Question

in 300 words why does the President want to reduce Cost-reimbursement contracts and why is it preferred to use a firm fixed type contract? who accepts the greatest risk under each type of contract and why is competition favored over the sole source.

Answer 1

1. The president wanted to move away from Bush policy of pushing more federal works to the private sectors which would results and introduce more tight regulations on contracts to that are exploitive and wasteful to the agencies.

There has been increase in over contracting hence there is need to cut the costs that are incurred on the contracting activities.

The president wanted to reduce the number of contractors that produced the substandard work and bring the work back to the agencies.

The presidents wanted to move away from the cost reimbursed contracts or no bid contracts and encourage the agencies to use the fixed price contracts in an effective way.

The president wanted to do away with the problems that faces the procurements processes in the federal government. The presidents wanted to see more increase in the tender borrowing which will bring more transparency .In summary the president wanted to reduce the costs that are incurred during the contracting and the procurements procedures.

2. This type of contracts have the required details and the set price for each work .The price negotiation usually is done before the contract is done and there are no variance if more or less resources are needed as planned .The contractor is the one who has the risk of managing the costs of work in order to get the profit hence the firm is relieved from the burden and risk of loss.
3. The contractor accept the greatest risk, because he has to manage the contract effectively in order to get profit.

4. It give all competent potential contractors the chance to do business with the government and the right to compete equally with others

It help to reduce collusion.

The competitive procedure provide a way for discover what is accessible to meet a particular government need and for choosing the best solution. The most important benefits of competition can often be the improved ideas, designs, technology, delivery, or quality of products and services that potential contractors are motivated to produce or develop to obtain government contracts.