Cost-Plus Draws a Crowd on the Right Vehicle

Cost-reimbursement is supposed to be the closed end of this market.

A contracting officer cannot put you on one until your accounting system is found adequate for determining costs applicable to the contract, which is FAR 16.301-3(a)(3), and 16.301-3(b) bars the arrangement outright for commercial products and commercial services. The bidder list gets filtered before anybody writes a proposal.

On the board running out between March 2027 and September 2028, that filter looks like it works. 424 of the 1,208 contracts are cost-reimbursement, carrying $139,912,155,782 of the board's $437.6B in obligations.

Among the ones that report an offer count, 62.6% came back with exactly one offer. Fixed-price: 46.1%.

Then we sorted the same 1,208 rows a second way.

The Cut That Moves More

Every row is either a standalone contract or an order placed against an indefinite-delivery vehicle, and FPDS tells you which by whether the award carries a parent PIID. Split the board on that and the one-offer rate reshuffles (chart below).

Cost-plus on a standalone contract is the ugly corner: 73.6%, 128 of 174. Put the identical pricing arrangement on a vehicle and it falls to 48.5%, 66 of 136.

Fixed-price standalone sits at 51.8%, fixed-price orders at 36.4%.

Which puts cost-plus work on a vehicle ahead of fixed-price work without one. The median order drew two offers in both pricing families; the median standalone contract drew one.

The mechanism is FAR 16.505(b)(1). Every awardee on a multiple-award vehicle has to be given a fair opportunity to be considered for each order, and above $7.5M that means a notice of the requirement, a real response period, the evaluation factors, and a debriefing. The pool is pre-qualified, so the accounting-system question 16.301-3 asks got answered once, at vehicle award. By the time the order competes, somebody already paid the toll.