Institutional Framework of Federal Acquisitions Research Paper

Institutional Framework of Federal Acquisitions - Research Paper Example risk in case of unpredictability of the market prices since the burden of the extra cost will be shouldered by him and not the other contracting party but also in case of a reduction in the price, the contractor will be on the benefitting end. This therefore provides the incentive for the contractor to do the planning work not only efficiently but effectively as well observing time and being accountable for each and everything as there is fear of bearing loss. The work being contracted on will therefore be completed mostly according to the budget and time (Feldman, 2012). 2. Discuss the importance of cost reimbursement contracts in creating effective, efficient and accountable acquisition planning. Support your discussion with FAR regulations. This type of contract is important to use in case the prices or the cost of what is to be acquired is uncertain. It therefore protects both parties (the contractor and the contacting party) from risks of price increase and therefore rendering t he planning useless in the process or slowing down the project. The benefactor in this type of contract is the contractor as he is reimbursed all the costs he incurs the way specified in the contract unless they exceed the agreed upon price â€Å"These contracts establish an estimate of total costs for the purpose of obligating funds and establishing a ceiling that the contractor may not exceed†¦( General Services Administration, Department of Defense, National Aeronautics and Space Administration, 2005)† This therefore provides a motivator and an incentive for the contractor to seek only the best of the materials and hence making the planning process and the final product effective. The contractor is also accountable for each and everything since there is reimbursement to be made. The contract type also requires justification on the part of the contractor for the decisions and materials included in the planning â€Å"the contracting officer shall document the rationale for selecting the contract type in the written acquisition plan and ensure the plan is approved and signed at least one level above the contracting officer† and the final work and hence making this a very efficient and effective type of contract to be entered into by especially non-profit organizations which often have financial and time constraints and pressure of accountability to the last cent. 3. Discuss the importance of time and material contracts in creating effective, efficient and accountable acquisition planning. Support your discussion with FAR regulations. This type of contract as stipulated in clause 16.601 is one of the most cost-effective, efficient and with the highest rate of accountability for both the contractor and his officers and also for the contracting party. This is so because it avoids any wastage of time or money and materials through uncertain estimates and no party for this matter may have to bear the loss of increase in the ceiling when planning. This is so because in this contract, the contractor is paid once the work is completed and according to