stylistic:tone, information:classification
Federal government contract types

The United States' Federal Acquisition Regulation (FAR), Part 16, describes the different types of contract available for use in federal government acquisition and when they may be used. In this context there are three main categories of contract: fixed-price contracts, cost-reimbursement contracts, and time-and-materials and labor-hour contracts. The Federal Acquisition Institute advises that selection of the best contract type is important, "as it is a driver of risk, incentives, and obligations for both the Government and the contractor". Government personnel are required by FAR 16.103(d) to record the reason why a particular type of contract was selected for each contract they let.