• GAO-09-921 Contract Management

United States Government Accountability Office
GAO Report to the Committee on Oversight
and Government Reform, House of
Representatives
September 2009
CONTRACT
MANAGEMENT
Extent of Federal
Spending under Cost-
Reimbursement
Contracts Unclear and
Key Controls Not
Always Used
GAO-09-921
 September 2009
CONTRACT MANAGEMENT
Accountability Integrity Reliability
Highlights
Highlights of GAO-09-921, a report to the
Extent of Federal Spending under Cost-
Reimbursement Contracts Unclear and Key Controls
Not Always Used
Committee on Oversight and Government
Reform, House of Representatives
Why GAO Did This Study What GAO Found
Federal agencies obligate billions The complete picture of the government’s use of cost-reimbursement
of dollars annually using cost- contracts is unclear. From fiscal years 2003 through 2008 federal obligations
reimbursement contracts. This type under cost-reimbursement contracts were reported to have increased $16
of contract involves high risk for billion, to $136 billion, which represented a decrease in the total percentage of
the government because of the federal obligations over the 6-year period, from 34 percent to 26 percent.
potential for cost escalation and
However, the overall downward trend is misleading. A significant increase has
because the government pays a
contractor’s costs of performance been reported for obligations using the “combination” contract type, a
regardless of whether the work is category that based on GAO’s analysis of 2008 data, includes many contracts
completed. As such, cost- with cost-reimbursement obligations that are not recorded as such. According
reimbursement contracts are to OFPP, a decision was recently made to eliminate the use of “combination”
suitable only when the cost of the as a Federal Procurement Data System-Next Generation contract type,
work to be done cannot be effective for all new contract awards starting in fiscal year 2010. In addition,
estimated with sufficient accuracy GAO found billions of dollars for which the contract type had been coded as
to use fixed-price contracts. “missing” in fiscal year 2008.
Agencies may use this contract
type only if certain conditions are Agencies’ rationales for using cost-reimbursement contracts were difficult to
met. At your request, GAO assessed determine because contracting officers frequently did not document—even in
(1) the extent of agencies’
obligations under these contracts,
acquisition plans—why they chose to use this contract type. The current
(2) the rationales for using this requirement for such documentation is minimal, but recent legislation (not yet
contract type, (3) determinations implemented in the Federal Acquisition Regulation) requires that acquisition
that contractors’ accounting plans address the rationale. Of the 92 contracts and orders GAO reviewed,
systems are adequate for about 30 percent did not include any documentation. The supporting
determining costs applicable to the documentation GAO did find generally did not explain why a cost-
contracts, and (4) procedures for reimbursement contract for the specific requirement was selected. GAO also
monitoring contractor cost found little evidence that agency officials are analyzing contracts’ pricing
controls. GAO analyzed federal history and requirements to determine if they can transition to a contract type
procurement data and contract with firmer pricing, even though experience may provide a basis for doing so.
files and interviewed contracting
and other government officials. Of the 92 contracts and orders GAO reviewed, about half had any evidence
What GAO Recommends that, at least within 4 years before contract award, contractors’ accounting
systems had been deemed adequate to determine costs applicable to the
GAO is making recommendations contract. Twenty contract files had no evidence that the contractors’
to the Office of Federal accounting systems were determined adequate and 20 other contract files
Procurement Policy (OFPP) contained determinations that had been made either many years before award
regarding how contracts are coded or after the contract was awarded. Inadequate accounting systems, or
in the government’s procurement accounting systems that had not been deemed adequate for many years, may
database and aimed at encouraging result in the government making improper payments to contractors.
timely analysis to determine if a
transition can be made to a
GAO found a range of procedures for monitoring contractor cost controls at
contract with a firmer pricing basis.
OFPP agreed with the the agencies in its review. Procedures at the civilian agencies generally call for
recommendations. The other program officials to review contractor invoices. At the Department of
agencies in GAO’s review generally Defense, cost surveillance depends on contractor-reported earned value
agreed with the findings in the management data, supplemented with audits for the purpose of testing
report or had no comments. whether invoiced costs are allowable. GAO’s prior work has raised concerns
View GAO-09-921 or key components. about the effectiveness of these audits.
For more information, contact John Needham
at (202) 512-4841 or needhamJK1@gao.gov.
United States Government Accountability Office
Contents
Letter 1
Background 4
Full Picture of Agencies’ Use of Cost-Reimbursement Contracts Is
Unclear 8
Agencies Purchase a Range of Services under Contracts Coded as
Cost-Reimbursement 12
Rationale for Using Cost-Reimbursement Contracts Is Often Not
Clear, and Analysis Is Not Conducted to Determine if Contract
Type with Firmer Pricing Is Warranted 14
Agencies Do Not Always Ensure That Contractors’ Accounting
Systems Are Adequate for Determining Costs Applicable to
Contracts 22
Various Procedures for Cost Surveillance Require Effective
Implementation to Avoid Improper Payments 28
Conclusions 34
Recommendations for Executive Action 34
Agency Comments and Our Evaluation 35
Appendix I Scope and Methodology 38
Appendix II Comments from the National Aeronautics and Space
Administration 42
Appendix III Comments from the Department of Health & Human
Services 43
Appendix IV GAO Contact and Staff Acknowledgments 47
Tables
Table 1: Agencies Reviewed and Percentages of Cost-
Reimbursement Obligations Reported in Fiscal Year 2007 2
Table 2: Contract Types 4
Page i GAO-09-921 Cost-Reimbursement Contracting
 Table 3: Areas of Overlap between Top 15 Categories Reported as
Cost-Reimbursement Contract Type and as Combination
Contract Type, Fiscal Year 2005 through July 13, 2009 10
Table 4: Ten Largest Procurement Categories Reported as Using
Cost-Reimbursement Contracts in Fiscal Year 2008 12
Table 5: Examples of Goods and Services Procured with Cost-
Reimbursement Contracts at the 10 Agencies in Our
Review 13
Table 6: Examples of Rationales Used to Show Why Cost-
Reimbursement Contracts Were Awarded 16
Table 7: Adequacy of Contractors’ Accounting Systems 25
Figures
Figure 1: Cost and Combination Type Contracts as a Percentage of
Total Obligations, Fiscal Years 1999 to 2008 9
Figure 2: DOD Procedures for Process and Approval of Interim
Invoices 31
Page ii GAO-09-921 Cost-Reimbursement Contracting
Abbreviations
AHRQ Agency for Healthcare Research and Quality
COR Contracting Officer’s Representative
DCAA Defense Contract Audit Agency
DCMA Defense Contract Management Agency
DOE Department of Energy
EVM Earned Value Management
FAR Federal Acquisition Regulation
FFP Firm Fixed Price
FPDS-NG Federal Procurement Data System-Next Generation
GAO Government Accountability Office
IRS Internal Revenue Service
IT Information Technology
NASA National Aeronautics and Space Administration
NIH National Institutes of Health
NSF National Science Foundation
OFPP Office of Federal Procurement Policy
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Page iii GAO-09-921 Cost-Reimbursement Contracting
United States Government Accountability Office
Washington, DC 20548
September 30, 2009
The Honorable Edolphus Towns
Chairman
The Honorable Darrell Issa
Ranking Member
Committee on Oversight and Government Reform
House of Representatives
Federal agencies obligate more than $100 billion annually using cost-
reimbursement contracts. This type of contract is considered high risk for
the government because of the potential for cost escalation and because
the government pays a contractor’s costs of performance regardless of
whether the work is completed. As such, cost-reimbursement contracts
are suitable only when the cost of the work to be done cannot be
estimated with sufficient accuracy to use any type of fixed-price contract.
To mitigate risk and help ensure that the best interests of the government
are served when entering into a cost-reimbursement contract, agencies
may use this contract type only if the contractor’s accounting system is
adequate for determining costs applicable to the contract. This helps
prevent situations where contractors bill the government for unallowable
costs. Appropriate government surveillance is also required to provide
reasonable assurance that the contractor is using efficient methods and
effective cost controls. At your request, we reviewed the federal
government’s use of cost-reimbursement contracts and
• identified agencies’ reported obligations under these contracts,
• determined what agencies are buying using cost-reimbursement contracts,
• assessed contracting officers’ rationales for using this contract type and
whether analysis is being conducted to determine whether a different
contract type is warranted based on experience with the requirement,
• determined whether contractors’ accounting systems had been deemed
adequate for determining costs applicable to the contracts, and
• identified agencies’ procedures for surveillance of contractor cost
controls.
To select the agencies included in our review, we analyzed cost-
reimbursement contract actions and dollars obligated as reported in the
Page 1 GAO-09-921 Cost-Reimbursement Contracting
 Federal Procurement Data System-Next Generation (FPDS- NG).1 Fiscal
year 2007 FPDS-NG data were the latest available at the time we selected
the agencies for review, but we subsequently obtained data on cost-
reimbursement obligations for fiscal year 2008 and included those data in
our trend analysis. Based on the fiscal year 2007 data, we grouped
agencies into one of three categories:
• agencies whose obligations under cost-reimbursement contracts were less
than 20 percent,
• agencies whose obligations were from 20 to 50 percent, and
• agencies whose obligations were 51 percent or higher.
We reviewed contract files for 10 randomly selected contracts or orders
(orders are used to procure goods or services from an established
contract) from each of 10 agencies that fell in the second and third
categories, with two exceptions. We reviewed only one contract at the
Corporation for National and Community Service and at the Department
of the Treasury’s Alcohol and Tobacco Tax and Trade Bureau, as those
contracts accounted for the totality of those agencies’ reported cost-
reimbursement contracts in fiscal year 2007. In all, we reviewed 92
contracts or orders issued under cost-reimbursement contracts. We tested
the reliability of the FPDS-NG data by comparing basic reported
information (such as contract number, contract type, and awarding
activity) to information in the contract or order files. Table 1 shows the
agencies where we conducted the file reviews and the percentages of
reported fiscal year 2007 obligations using cost-reimbursement contracts
or orders.
Table 1: Agencies Reviewed and Percentages of Cost-Reimbursement Obligations
Reported in Fiscal Year 2007
Reported percentage of
cost-reimbursement
Department/agency obligations
Department of the Air Force/Aeronautical Systems Center 33
Corporation for National and Community Service 35
Department of the Treasury/Internal Revenue Service 36
Department of the Navy/Navy Strategic Systems Program 39
1
FPDS-NG contains detailed information on contract actions and identifies, among other
data, the contract types used by federal agencies in procuring goods and services.
Page 2 GAO-09-921 Cost-Reimbursement Contracting
 Reported percentage of
cost-reimbursement
Department/agency obligations
Environmental Protection Agency/Cincinnati Procurement 45
Operations Division
National Aeronautics and Space Administration/Glenn 81
Research Center
National Science Foundation 81
Department of Health and Human Services/Agency for 87
Healthcare Research and Quality
Department of Energy 90
Department of Defense/Defense Microelectronics Activity 97
Department of the Treasury/Alcohol and Tobacco Tax and 100
Trade Bureau
Source: GAO analysis of FPDS-NG data.
We supplemented our file reviews by interviewing the cognizant
contracting officials and personnel responsible for surveillance of
contractor costs. We identified surveillance procedures at the agencies in
our review but, because of time constraints, did not assess compliance
with those procedures for the 92 contracts and orders. In addition, we
interviewed agency procurement policy representatives and heads of
contracting activities for 10 agencies from the first category cited above,
which had reported a very high use (95 percent or more) of fixed-price
contracts, to determine the reasons for their low use of cost-
reimbursement contracts. We reviewed relevant sections of the Federal
Acquisition Regulation (FAR), implementing agency policies and
regulations, our Standards for Internal Control in the Federal
Government, 2 and past GAO reports. In determining whether the
contractors’ accounting systems had been deemed adequate before
contract award, we used a period of 4 years, which is the outermost time
frame in Defense Contract Audit Agency (DCAA) policy, as being “current”
for auditing an accounting system that has a significant impact on
government contract costs. We sought any evidence in the contract file
that the contracting officer had made a determination of the adequacy of a
contractor’s accounting system and, where there was no evidence, we held
discussions with the contracting officer.
2
GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1
(Washington, D.C.: November 1999).
Page 3 GAO-09-921 Cost-Reimbursement Contracting
 We conducted this performance audit from July 2008 to September 2009 in
accordance with generally accepted government auditing standards. Those
standards require that we plan and perform the audit to obtain sufficient,
appropriate evidence to provide a reasonable basis for our findings and
conclusions based on our audit objectives. We believe the evidence
obtained provides a reasonable basis for our findings and conclusions
based on our audit objectives. Appendix I provides more detail on our
scope and methodology, as well as a listing of the 10 agencies with
reported high use of fixed-price contracts.
Federal agencies can choose among three main contract types to procure
Background goods and services: fixed-price, time-and-materials, and cost-
reimbursement. Each contract type comes with a different level of cost or
performance risk for the government, as shown in table 2.
Table 2: Contract Types
Government Contractor Risk to…
Fixed-price
Pays fixed price even if actual total cost of product or service falls short of or Provides an acceptable Contractor
exceeds the contract price. May also pay an award or incentive fee related to deliverable at the time, place, and
performance. price specified in the contract.
Time-and-materials
Pays fixed per-hour labor rates that include wages, overhead, general Makes good faith effort to meet Government
administrative costs, and profit; government might reimburse contractor for other government’s needs within the
direct costs, such as travel and materials costs. Contracts include a ceiling price ceiling price.
that the contractor exceeds at its own risk. Government is not guaranteed a
completed end item or service within the ceiling price.
Cost-reimbursement
Pays contractor’s allowable costs incurred, to the extent prescribed by the Makes good faith effort to meet Government
contract. Also may pay a fee, which may be related to performance. Contracts government’s needs within the
include an estimated total cost for purposes of obligating funds and a ceiling that estimated cost.
the contractor exceeds at its own risk (unless approved by the contracting
officer).Government is not guaranteed a completed end item or service within the
estimated cost. The FAR prohibits the use of cost-reimbursement contracts to
acquire commercial items.
Source: GAO analysis of the FAR, Defense Federal Acquisition Regulation Supplement, and DOD Contract Pricing Guide.
Different types of cost-reimbursement contracts can be used, based on
whether incentives, award fees, or other arrangements can be used to
Page 4 GAO-09-921 Cost-Reimbursement Contracting
 motivate contractor efforts and discourage contractor inefficiency and
waste. Some of these types, and their limitations, follow.3
• Cost-sharing contracts: The contractor receives no fee and is reimbursed
only for an agreed-upon portion of its allowable costs. A cost-sharing
contract may be used when the contractor agrees to absorb a portion of
the costs, in the expectation of substantial compensating benefits.
• Cost-plus-incentive-fee contracts: An objective relationship can be
established between the fee earned and performance results, such as
actual costs or delivery dates. This contract type provides for an initially
negotiated fee to be adjusted later by a formula based on the relationship
of total allowable costs to total target costs.
• Cost-plus-award-fee contracts: Objective incentive targets are not feasible
and judgmental standards, such as quality and technical ingenuity, can be
applied. A potential fee is intended to provide an incentive for excellence
in such areas as quality, timeliness, technical ingenuity, and cost effective
management; award of the fee is a unilateral decision made solely by the
government. We have reported on agencies’ use of cost-plus-award-fee
contracts, finding in some cases that award fees had been paid to
contractors regardless of acquisition outcomes.4
• Cost-plus-fixed-fee contracts: These contracts provide for payment to the
contractor of a negotiated fee that is fixed at contract inception. The fixed
fee does not vary with actual cost, but may be adjusted as a result of
changes in the work to be performed under the contract. This contract
type permits contracting for efforts that might otherwise present too great
a risk to contractors, but it provides the contractor only a minimum
incentive to control costs. Cost-plus-fixed-fee contracts are suitable, for
example, when contracting for research or preliminary exploration or
study, and the level of effort required is unknown.
Cost-reimbursement contracts are suitable only when uncertainties
involved in contract performance do not permit costs to be estimated with
sufficient accuracy to use a fixed-price contract. The two major reasons
for the inability to accurately estimate costs are (1) the lack of knowledge
3
See FAR Subpart 16.3 and Subpart 16.4 for more details on these contract types’
descriptions and applications.
4
GAO, Federal Contracting: Guidance on Award Fees Has Led to Better Practices but Is
Not Consistently Applied, GAO-09-630 (Washington, D.C.: May 29, 2009); NASA
Procurement: Use of Award Fees for Achieving Program Outcomes Should Be Improved,
GAO-07-58 (Washington, D.C.: Jan. 17, 2007); and Defense Acquisitions: DOD Has Paid
Billions in Award and Incentive Fees Regardless of Acquisition Outcomes, GAO-06-66
(Washington, D.C.: Dec. 19, 2005).
Page 5 GAO-09-921 Cost-Reimbursement Contracting
of the work needed to meet the requirements of the contract, for example,
under research contracts, which necessarily involve substantial
uncertainties, and (2) the lack of cost experience in performing work, such
as the development of a weapon system because manufacturing
techniques and specifications are not stable enough to warrant contracting
on a fixed-price basis. We have reported that during weapon system
development, the Department of Defense (DOD) often asks prime
contractors to develop cutting-edge systems and awards cost-
reimbursement contracts for the work. Because the government often
does not perform the up-front analysis needed to determine whether its
needs can be met by the contract requirements, significant cost increases
can occur under the contracts as the scope of requirements changes or
becomes better understood. As of fiscal year 2007, for example, DOD
anticipated reimbursing the prime contractors on the Joint Strike Fighter
and Future Combat Systems programs nearly $13 billion more than
initially expected.5
Cost-reimbursement contracts involve significantly more government
oversight than do fixed-price contracts, which means the government
incurs additional administrative costs on top of what it is paying the
contractor. For example, the government must determine that the
contractor’s accounting system is adequate for determining costs related
to the contract and update this determination periodically. In addition,
contractor costs need to be monitored—known as cost surveillance—to
provide reasonable assurance that efficient methods and effective cost
controls are used.
Congress has taken action to increase oversight of these contracts, for
DOD specifically as well as governmentwide. The John Warner National
Defense Authorization Act for Fiscal Year 2007 called for the Secretary of
Defense to modify DOD’s regulations to require at Milestone B (approval
for major acquisition programs to enter the engineering and manufacturing
development phase) documentation of the basis for the contract type.
Before approving the use of a cost-type contract for development, the
Milestone Decision Authority must execute a written determination that
among other things, the program is so complex and technically challenging
that it would not be practicable to reduce program risk to a level that
5
GAO, Defense Acquisitions: Assessments of Selected Weapon Programs, GAO-08-467SP
(Washington, D.C.: Mar. 31, 2008).
Page 6 GAO-09-921 Cost-Reimbursement Contracting
would permit the use of a fixed-price type contract.6 Further, the
conference report accompanying the act stated that DOD should reduce
program risk to the point that the use of a fixed-price contract for a major
acquisition program may be appropriate.
In addition, the Duncan Hunter National Defense Authorization Act for
Fiscal Year 2009 called for revisions to the FAR, to include guidance on
(1) when and under what circumstances cost-reimbursement contracts are
appropriate, (2) the acquisition plan findings necessary to support
decisions to use cost-reimbursement contracts, and (3) the acquisition
workforce resources necessary to award and manage cost-reimbursement
contracts.7 The FAR revisions were required by July 11, 2009, but as of
September 28, 2009, had not been implemented. This act also states that
within 1 year after these revisions are promulgated, the inspector general
for each executive agency shall review the use of cost-reimbursement
contracts by the agency for compliance with these regulations and must
include the results of the review in the inspector general’s next semiannual
report.8
Finally, in a March 2009 memorandum on government contracting issued
to the heads of departments and agencies, President Obama noted that
excessive reliance by the federal government on cost-reimbursement
contracts “creates a risk that taxpayer funds will be spent on contracts
that are wasteful, inefficient, subject to misuse, or otherwise not well
designed to serve the needs of the Federal Government or the interests of
the American taxpayer.” The President directed the Office of Management
and Budget to develop guidance to assist agencies in “reviewing, and
creating a process for ongoing review of, existing contracts in order to
identify contracts that are wasteful, inefficient, or not otherwise likely to
meet the agency’s needs, and to formulate appropriate corrective action in
a timely manner.” In this regard, on July 29, 2009, the Office of
Management and Budget sent a memorandum to the heads of departments
6
This provision was implemented in the Defense Federal Acquisition Regulation
Supplement and was effective January 24, 2008. DFARS 234.004.
7
Duncan Hunter National Defense Authorization Act for Fiscal Year 2009, Pub. L. No. 110-
417, § 864.
8
This requirement applies only to those executive agencies that awarded cost-
reimbursement contracts or issued orders (under contracts previously awarded) of at least
$1 billion in the fiscal year proceeding the fiscal year in which the assessments and reports
were submitted.
Page 7 GAO-09-921 Cost-Reimbursement Contracting
 and agencies requiring agencies to reduce high-risk contracting
authorities, such as cost-reimbursement contracts. The memorandum
requires agencies to reduce by 10 percent the share of dollars obligated in
fiscal year 2010 under new contract actions that are awarded with high-
risk contracting authorities.
The complete picture of the government’s use of cost-reimbursement
Full Picture of contracts is unclear. From fiscal years 2003 through 2008, federal
Agencies’ Use of Cost- obligations under cost-reimbursement contracts were reported to have
increased by $16 billion, from $120 billion to $136 billion.9 When viewed as
Reimbursement a percentage of total reported federal obligations, this represented a
Contracts Is Unclear decrease over the 6-year period, from 34 percent to 26 percent.10 However,
this decrease is misleading for several reasons, including a significant
increase in agencies’ reported obligations under the “combination”
contract type, which includes cost-reimbursement obligations, and
contradictory guidance in the FPDS-NG user manual, which could result in
misreporting of contract type. Further, although contract type is a data
element field required in FPDS-NG for all awards, we found billions of
dollars reported as missing a contract type (i.e., no specific contract type
was indicated) or indicating “other” as the contract type. The contract type
field displays the type of contract that applies to the particular
procurement. It is incumbent on the contracting officers and agencies to
ensure the accuracy of all information submitted.
Significant Increase in Combination contracts, one of the contract type fields in FPDS-NG, are
“Combination” Contract those where two or more contract types are used, such as in different line
Type Belies Reported Use items in one contract action. Agencies have recently reported a significant
increase in obligations under this contract type, from less than 1 percent
of Cost-Reimbursement ($1.3 billion) of total government obligations in fiscal year 2004 to almost 8
Contracts percent ($39 billion) in fiscal year 2008. DOD obligations accounted for
$34 billion, or 87 percent, of this amount.
Figure 1 depicts the reported trends in the percentage of total obligations
under cost-reimbursement contracts and under combination contracts.
9
This amount is in constant fiscal year 2008 dollars.
10
In order to use consistent data through the time period, we only included actions over
$25,000.
Page 8 GAO-09-921 Cost-Reimbursement Contracting
Figure 1: Cost and Combination Type Contracts as a Percentage of Total
Obligations, Fiscal Years 1999 to 2008
Percentage
50
40
30
20
10
0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Year
Cost contracts
Combination contracts
Source: GAO analysis of FPDS-NG data.
We analyzed fiscal year 2008 FPDS-NG obligations coded as combination
contracts and found that half of the $39 billion was obligated under
contracts that had at least some cost-type actions, and about a quarter of
this amount ($9 billion) went to contracts that had 50 percent or more
cost-type obligations. These obligations were not recorded as cost-
reimbursement in FPDS-NG.
Further illustrating the potential overlap between combination and cost-
reimbursement contract types, we found that contracts coded as
combination are used to procure similar items as those coded as cost-
reimbursement. Our examination of the 15 categories of items most often
procured under both cost-reimbursement and combination contract types
over the past several years showed substantial overlap. Table 3 depicts the
top 15 categories in both contract types and the 11 categories that are the
same, from fiscal year 2005 to July 13, 2009, the most current data
available at the time of our analysis.
Page 9 GAO-09-921 Cost-Reimbursement Contracting
Table 3: Areas of Overlap between Top 15 Categories Reported as Cost-
Reimbursement Contract Type and as Combination Contract Type, Fiscal Year 2005
through July 13, 2009
Category also reported
Category reported as cost-reimbursement as combination
Defense systems research and development X
Professional services X
Operate government-owned buildings X
Management support services X
General healthcare services X
Space research and development
Maintenance, repair, and rebuild of equipment X
Automated data processing and telecommunications X
Other research/development X
Aircraft/airframe structure components X
Defense (other) research and development X
Motor vehicles, cycles, and trailers
Space vehicles
Guided missilesa
General science/technology research and development X
Source: GAO analysis of FPDS-NG data.
a
Guided missiles was the 16th category reported under the combination contract type.
Because many of the combination contracts include cost-type obligations,
those contracts coded as cost-reimbursement do not portray the full
picture of the government’s use of cost-reimbursement contracting. FPDS-
NG does not delineate what contract types comprise those coded as
combination, for example, whether they are cost-plus-award-fee and cost-
plus-incentive-fee contracts, or a mix of fixed-price and labor-hour line
items.
We also identified conflicting definitions in the FPDS-NG user manual,
which agency officials use as guidance when entering contract information
into the database, that further complicate efforts to identify obligations
under cost-reimbursement contracts. For contracts compo