Types of Contracts and Performance-Based Acquisition Research Paper

Types of Contracts and Performance-Based Acquisition - Research Paper Example They are the most common form of contract and are used in majority of the contractual agreements. They are used when uncertainties are involved in contracts and they do not allow costs to be submitted with accuracy to a fixed price contract. It is a favorable contract in conditions where the outcome of the contract or the project is uncertain. A contract which has a written preliminary contractual instrument and which is able to authorize a specified contractor and can begin manufacturing supplies and in performing some specific services is called a letter contract. It could be used in circumstances where the interests of government demand that the contractor is given a binding level of commitment and contractor is able to start working instantly and is able to negotiate a contract in the specified time. Performance based contracts are not literally contracts but a specific acquisition method where requirements can be described by a performance work statement or a certain statement of objectives. Performance based contracts are made to ensure that contractors are able to meet quality levels and payment is related to the specified contract standards. The choice of which contract is to be chosen for vehicle purchase is related to general contract law. Parties to a contract are allowed to select the contract in which they have certain rights and obligations towards each other (Koffman, 2007). It is the most pivotal concept of contract through which parties are obligated to make promises and they are bound to follow those promises made. The ideal contract, which could be chosen for vehicle purchase, is performance-based contract as it portrays a sense of mutual consideration among the parties that may not be any direct or formal prerequisite for selection of a contractual law unless the parties to a contract agree to it. As mentioned before, this contract will ensure that contractors are able to