Institutional Framework of Federal Acquisitions Government Agencies Essay

Institutional Framework of Federal Acquisitions

Government agencies rely heavy on contracting officers to obtain goods and services at fair prices and in a timely manner. This is possible with the billions of dollars tax dollars entrusted to them annually. Evidently, it is necessary for purchasing agencies along with the Government Accountability Office (GAO) and the Federal Acquisition Regulation (FAR) to create accountability in organizations and continue to improve weaknesses in key areas of federal acquisition (Cameron, 2000).

Importance of fixed price contracts in creating effective, efficient, and accountable acquisition planning

Fixed price contracts refers to contracts that do not need further discussions and engagement in fixing the prices of commodities to be acquired or transferred by an organization. In this contract, a negotiable amount is agreed upon no matter the expenses incurred by the contractor. Fixed price contracts reduce cases of fraud and manipulation of the prices of goods and services under transfer by the Federal Acquisition Regulation agencies. Agencies fix their prices in order to reduce cases of fraud, mistrust, and enable an agreeable pricing of transport and communication costs between the contractor and the government. This is made possible with FAR connotations that spell fixed pricing in commodities to be acquired. This creates effectiveness and efficiency in arriving at affordable acquisition structures. Fixing the prices of commodities help in reducing possibilities of making loses when fixing the ultimate price of the items in the market. According to FAR regulations, it is necessary to include budget estimates together with derivations on how they were derived. This should be included in the materials under acquisition process, besides funds under contractual terms (Schwalbe, 2010).

Importance of cost reimbursement contracts in creating effective, efficient, and accountable acquisition planning

Cost reimbursement refers to a situation where the contractor is paid all of the allowable expenses to a limit where he or she will be able to access profits. The difference between the contract and fixed price contract is that prices are not negotiable to limits that see the contractor accrue losses. The contractor must access profits in order to make the contract lively. The government obligates funds when a total estimate has been made based on the nature of the contract. Risks of the contract exceed are made by the contracting officer in…