# AFFARS PART 5316Types of Contracts

- PART 5316
  Types of Contracts

- SUBPART 5316.1 — SELECTING CONTRACT TYPES

- 5316.101 General

- SUBPART 5316.4 — INCENTIVE CONTRACTS

- 5316.401 General [INTERIM CHANGE: See Policy Memo 10-C-12]
- 5316.404 Fixed-price contracts with award fees

- 5316.405-2 Cost-plus-award-fee contracts

- SUBPART 5316.5 — INDEFINITE-DELIVERY CONTRACTS

- 5316.503 Requirements Contracts [INTERIM CHANGE: See Policy Memo 10-C-09]
- 5316.504 Indefinite-Quantity Contracts [INTERIM CHANGE: See Policy Memo 10-C-09]
- 5316.505 Ordering [INTERIM CHANGE: See Policy Memo 10-C-08]

- 5316.505-90 Decentralized ordering

- SUBPART 5316.6 – TIME-AND-MATERIALS, LABOR-HOUR, AND LETTER CONTRACTS

- 5316.603 Letter contracts (No Text)

- 5316.603-3 Limitations

PART 5316
Types of Contracts

[Revised October 30, 2009]

[INTERIM CHANGES: See Policy Memos 10-C-08, 10-C-09, and 10-C-12]
NOTE: Select your Email certificate (when prompted) to access the memos above.

SUBPART 5316.1 — SELECTING CONTRACT TYPES

5316.101 General

The true measure of success of any contract is the outcome as illustrated by the timely delivery of quality products, systems or services to the warrior at an affordable price. Selecting the right contractor and establishing the appropriate contract type and results-based incentive(s) is key to structuring a successful business deal that will achieve these results. Incentives, both monetary and non-monetary, are a valuable and powerful tool to reinforce exceptional performance and reduce acquisition costs.

SUBPART 5316.4 — INCENTIVE CONTRACTS

5316.401 General [INTERIM CHANGE: See Policy Memo 10-C-12]

(d) As used in this subpart, Fee Determining Official is the individual who makes the final determination regarding the amount of the award fee earned by the contractor during the evaluation period.

5316.404 Fixed-price contracts with award fees

(a) See 5316.405-2 below.

5316.405-2 Cost-plus-award-fee contracts

(a) The PEO/DAO is the Fee Determining Official for the PEO/DAO assigned programs. For Other Contracting, the HCA will designate the Fee Determining Official. The PEO/DAO or HCA for Other Contracting may designate this responsibility on an individual contract or class basis. This designation may be made by name, position, or function, without limitation.

SUBPART 5316.5 — INDEFINITE-DELIVERY CONTRACTS

5316.503 Requirements Contracts [INTERIM CHANGE: See Policy Memo 10-C-09]

5316.504 Indefinite-Quantity Contracts [INTERIM CHANGE: See Policy Memo 10-C-09]

(a) Description.

(1) See MP5316.504 for the requirement to obligate funds when awarding indefinite-delivery indefinite-quantity (IDIQ) contracts.

5316.505 Ordering [INTERIM CHANGE: See Policy Memo 10-C-08]

(b) Orders under multiple award contracts.

(5) Task and delivery order ombudsman. See 5301.91.
5316.505-90 Decentralized ordering

For contracts that authorize decentralized ordering (i.e., ordering by a contracting office at any other location), the contracting officer with overall responsibility for the contract shall:

(a) Ensure that adequate control procedures are in place before any orders are authorized; and

(b) Exercise oversight of decentralized ordering throughout the period of performance under the contract to ensure that the procedures are followed.

SUBPART 5316.6 – TIME-AND-MATERIALS, LABOR-HOUR, AND LETTER CONTRACTS

5316.601(d)-90 Limitations

Determinations and Findings (D&Fs) for Time-and-Materials contracts and orders under Indefinite-Delivery contracts for services above $1M (including all options) shall be approved by the Chief of the Contracting Office.

5316.603 Letter contracts (No Text)

5316.603-3 Limitations

For AFMC and SMC actions equal to or greater than $50M, approval to use a letter contract may only be exercised by the SCCO. For actions under $50M, the approval authority may be delegated by the SCCO to no lower than the COCO. For all other contracting activities, the approval authority may not be delegated below the SCO.