Investments in Developing Energy Assets (IDEA)

This action was not a Fixed Price Contract.

The contract type is a cost type. The contract type was selected to commensurate with the foreseen level of risk in performance of the SOW. The objective was to establish the pricing arrangement that is most likely to produce a fair and reasonable price for performing the SOW by weighing cost and technical risks and consciously assigning them to either the Government or the contractor. If too much risk is assigned to the contractor, then there will be excessive pricing contingencies included to cover the high level of risk. If, on the other hand, not enough risk is left for the contractor, then there will be little or no incentive for exercising management skill to perform efficiently and thereby control costs