This procedure would continue until a mutually satisfactory contract has been negotiated. A firm must not begin work until properly directed by the contracting officer. A FFP contract is an agreement to pay a certain price for specified services and products. Monthly progress payments are made based upon completed work. ID contracts are generally used for multiple, small A-E efforts.
Work is accomplished by individually negotiated delivery orders.
Contracts usually include an option year with the same monetary limits. The ID contract consists of negotiated rates for all anticipated labor disciplines, overhead, tests, supplies, travel and other items. These contract rates are then used in pricing individual delivery orders. Monthly progress payments are also made based upon completed work for each order. A specified minimum amount is guaranteed for an ID contract.