Contract Vehicles & Methods — The Complete DoD Contracting Cone
The Defense Acquisition University (DAU) Contracting Cone provides a comprehensive visual framework of the various acquisition and contracting strategies available to the Department of Defense (DoD). This framework enables acquisition professionals to select the optimal strategy based on specific requirements, constraints, and desired outcomes. The strategies are broadly categorized into Federal Acquisition Regulation (FAR) based strategies and Non-FAR statutory strategies [1].
FAR-Based Strategies
FAR-based strategies encompass traditional contracting methods governed by the Federal Acquisition Regulation. These strategies offer established procedures and protections for both the government and contractors.
| Strategy | Description | Key Applications & Thresholds | Regulatory Reference |
|---|---|---|---|
| Simplified Acquisition Procedures | Streamlined processes for acquiring supplies and services below the Simplified Acquisition Threshold (SAT). Includes Micro-Purchases, Purchase Orders, and Blanket Purchase Agreements. | SAT is currently $350,000. Micro-Purchase Threshold is $15,000. Reduces administrative burden for smaller purchases [2] [3]. | FAR Part 13 |
| Commercial Items | Procedures for acquiring commercial products and services, including Non-Developmental Items (NDI) and Commercial Off-the-Shelf (COTS) products. | Used for IT products, software licenses, and commercial solutions. Contract types are limited to Firm-Fixed-Price (FFP) or Time-and-Materials (T&M). FAR 13.5 allows simplified procedures up to $9M [4] [5]. | FAR Part 12 |
| Contracting by Negotiation | Procedures for competitive and non-competitive open market acquisitions exceeding the SAT. Allows for negotiation of terms, conditions, and pricing. | Used for major weapon systems, research and development, and complex services. No funding thresholds exist, providing maximum flexibility [6]. | FAR Part 15 |
| Federal Supply Schedules | Simplified ordering process for obtaining commercial supplies and services at volume-discounted prices from pre-negotiated contracts. | Agencies can place Task Orders, Delivery Orders, or establish Blanket Purchase Agreements (BPAs) against GSA Schedules [7]. | FAR Subpart 8.4 |
| Indefinite Delivery Indefinite Quantity (IDIQ) | Contracts that provide for an indefinite quantity of supplies or services during a fixed period. Includes Government-wide Acquisition Contracts (GWACs) and Multi-Agency Contracts (MACs). | Reduces procurement lead time for recurring needs. Orders are subject to fair opportunity requirements [8]. | FAR Subpart 16.5 |
| Agreements | Written instruments of understanding (not actual contracts) that establish terms for future contracts or orders. Includes Basic Agreements and Basic Ordering Agreements. | Used to expedite future contracting actions when recurring needs are anticipated [9]. | FAR Subpart 16.7 |
| Small Business | Methods for reserving acquisitions for exclusive participation by various categories of small businesses. | Includes Small Business Set-Asides and Direct 8(a) awards to support industrial base diversity [10]. | FAR Part 19 |
| Broad Agency Announcement (BAA) | Competitive process to obtain proposals for basic and applied research to advance cutting-edge technologies. | Funded using RDT&E funds. Cannot be used for specific system requirements or production [11]. | FAR 35.016 |
| Commercial Solutions Opening (CSO) | Competitive process to obtain innovative commercial solutions or new capabilities that fulfill requirements or close capability gaps. | Can award FAR contracts or Other Transactions. Awards exceeding $100M require high-level approval [12]. | DFARS 212.70 |
Contract Types
Within FAR-based strategies, particularly FAR Part 15, contracting officers must select an appropriate contract type based on risk allocation. The primary categories are Fixed-Price and Cost-Reimbursement contracts [13].
| Contract Type Category | Description | Common Variations | Risk Allocation |
|---|---|---|---|
| Fixed-Price | The contractor is paid a pre-negotiated price regardless of the actual costs incurred during performance. | Firm-Fixed-Price (FFP), Fixed-Price Incentive Firm (FPIF), Fixed-Price with Economic Price Adjustment (FP-EPA). | Maximum risk on the contractor; minimal risk on the government. |
| Cost-Reimbursement | The government reimburses the contractor for allowable, allocable, and reasonable costs incurred, up to a defined ceiling. | Cost-Plus-Fixed-Fee (CPFF), Cost-Plus-Incentive-Fee (CPIF), Cost-Plus-Award-Fee (CPAF). | Higher risk on the government; requires the contractor to have an approved accounting system. |
| Time-and-Materials (T&M) | The government pays for direct labor hours at fixed hourly rates and materials at cost. | T&M, Labor-Hour (LH). | High risk on the government; used only when it is not possible to estimate the extent or duration of the work. |
Non-FAR and Statutory Strategies
Non-FAR strategies provide the DoD with flexible mechanisms to access innovative technologies, engage non-traditional defense contractors, and accelerate the acquisition process outside the traditional procurement framework.
Other Transactions (OTs)
Other Transactions are legally binding instruments other than standard contracts, grants, or cooperative agreements. They are designed to attract non-traditional defense contractors by removing barriers such as Cost Accounting Standards (CAS) compliance and restrictive intellectual property clauses [14].
| OT Type | Description | Key Requirements | Statutory Authority |
|---|---|---|---|
| Research OTs | Used for basic, applied, and advanced research projects. Typically requires a 50/50 cost-sharing arrangement to the maximum extent practicable. | Does not include authority for transition to follow-on production [15]. | 10 U.S.C. § 4021 |
| Prototype OTs | Used to acquire a reasonable number of prototypes to evaluate technical or manufacturing feasibility. | Requires significant participation by a non-traditional contractor, small business, or a 1/3 cost share. Allows for non-competitive transition to production [16]. | 10 U.S.C. § 4022 |
| Procurement for Experiments | Authorizes the purchase of quantities necessary for experimentation or technical evaluation in nine specific areas (e.g., ordnance, signal, energy). | Requires a Determination & Finding (D&F). Can be executed rapidly without formal competitive procedures [17]. | 10 U.S.C. § 4023 |
Research & Development Agreements
| Agreement Type | Description | Statutory Authority |
|---|---|---|
| Cooperative Research and Development Agreement (CRADA) | Authorizes federal labs to collaborate with industry or academia. The government may contribute resources but no funds; the partner may contribute funds and resources [18]. | 15 U.S.C. § 3710a |
| Partnership Intermediary Agreement (PIA) | Agreements with state/local agencies or nonprofits to engage academia and industry on behalf of the government to accelerate technology transfer and licensing from federal labs [19]. | 15 U.S.C. § 3715 |
| Technology Investment Agreement (TIA) | Assistance instruments used when the government seeks to retain intellectual property rights that deviate from the Bayh-Dole Act [15]. | 32 CFR Part 37 |
Additional Innovation Pathways
| Pathway | Description | Key Features | Authority |
|---|---|---|---|
| SBIR / STTR | Gated programs (Phases I, II, III) requiring federal agencies to allocate R&D budgets to small businesses to stimulate innovation. | Phase III allows for sole-source commercialization awards. OTs can be used as award instruments [20]. | 15 U.S.C. § 638 |
| Prize Competitions | Competitions to award cash prizes for advanced technology achievements. | Prizes up to $2M can be awarded without USD R&E approval. Widely used by programs like Army xTech [21]. | 10 U.S.C. § 4025 |
| Middle Tier of Acquisition (MTA) | An alternative acquisition pathway intended to fill the gap for capabilities that can be rapidly prototyped or fielded within five years. | Exempt from JCIDS and traditional DoDI 5000.01 processes. Consists of Rapid Prototyping and Rapid Fielding paths [22]. | Section 804, FY16 NDAA |
| Grants and Cooperative Agreements | Financial assistance instruments used to transfer a thing of value to carry out a public purpose of support or stimulation. | Grants have no substantial government involvement; Cooperative Agreements involve substantial interaction. | 31 U.S.C. § 6304 / 6305 |
References
[1] DAU Contracting Cone
[2] FAR Part 13 - Simplified Acquisition Procedures
[3] Inflation Adjustment of Acquisition-Related Thresholds (2025)
[4] DAU - Commercial Items (FAR Part 12)
[5] FAR Subpart 13.5 - Simplified Procedures for Certain Commercial Products
[6] DAU - Contracting by Negotiation (FAR Part 15)
[7] DAU - Federal Supply Schedules
[8] DAU - Indefinite Delivery Indefinite Quantity (IDIQ)
[9] DAU - Agreements (FAR Subpart 16.7)
[10] DAU - Small Business (FAR Part 19)
[11] DAU - Broad Agency Announcement (BAA)
[12] DAU - Commercial Solutions Opening (CSO)
[13] DAU - Contract Type Matrix
[14] DAU - Other Transactions
[15] DAU - Research OTs
[16] DAU - Prototype OTs
[17] DAU - Procurement for Experimental Purposes
[18] DAU - Cooperative Research and Development Agreement (CRADA)
[19] DAU - Partnership Intermediary Agreement (PIA)
[20] DAU - SBIR/STTR
[21] 10 U.S.C. 4025: Prizes for advanced technology achievements
[22] DAU - Middle Tier of Acquisition (MTA)