What are the two main types of contracting methods used in OCS?

The two main types of contracting methods used in Operational Contract Support are fixed-price contracts and cost-reimbursement contracts.

Fixed-price contracts are characterized by a set price that is agreed upon at the onset of the contract. This type of contracting method is beneficial for well-defined projects where costs can be estimated accurately. The contractor assumes the risk by agreeing to complete the project for the agreed-upon price, which incentivizes efficiency and cost management.

Cost-reimbursement contracts, on the other hand, are structured to allow the contractor to be reimbursed for allowable costs incurred during the performance of the contract, along with an additional fee that represents profit. This type of contract is advantageous when project specifications are not well-defined, allowing for flexibility as actual costs can vary. The risk is borne more by the contracting agency, as it must cover all allowable costs.

Together, these two contract types provide a balanced approach to OCS by accommodating various project needs and levels of risk associated with cost estimation and performance outcomes.