These different elements are important, because they make it difficult for the federal government to adjustment to large scale projects. This is problematic, because it means that inevitable cost overruns and delays will occur (despite using these agreements to deal with these issues). (Carr, 2004)
Discuss which element(s) of cost-reimbursement contracts tend to produce the biggest troubles for contractors and why.
The biggest elements that are giving contractors the largest challenges with reimbursement agreements are the lack of flexibility they have. Like with the federal government, contractors have to work within the overall scope of the accord. During the course of various projects, this can often lead to cost overruns. The reason why, is because the contractor must issue new agreements to: cover additional costs or changes to the underlying work. Once this occurs, it means that it is only a matter of time until there will be delays and costs will begin to soar. (Carr, 2004)
Select one other contract type (neither fixed-price nor cost-reimbursement) and explain its pros and cons from the perspective of the federal government.
Another type of agreement that could be utilized is: the fixed price with economic price adjustment contract. This is when the federal government will allow for sealed bidding to take place. However, there are provisions inside the agreement that will compensate for increases based upon changes in economic conditions (such as: rising costs for raw materials). This is important, because it shows how this type of agreement is designed to provide increased amounts of flexibility during the process. (Manuel, 2010, pp. 3 -- 6)
The advantage of using these kinds of contracts (from the viewpoint of the federal government) is that it is providing increased amounts of flexibility. This is significant, because it will allow federal officials to use this as way to: find the lowest costs possible with the greatest benefits....
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