NAVY SCHOOL MANAGEMENT MANUAL

4.6. Firm-Fixed Price Contracts
Most Navy contracts for training related services are firmfixed
price contracts.
This type of contract specifies a fixed price that the
contractor will receive for items/services listed in
the contract. A firm-fixed price requirements type
contract for instructional services specifies class
unit prices for the courses covered in the contract
based on the COR's written request to the contracting
officer.
Once approved, the contracting officer orders the
number of classes for each course into the contract
through the use of delivery orders.
Delivery orders are normally issued monthly.
Delivery orders should list the classes to be taught
by the contractor and the dates that the classes are
to be convened and completed. When the contracting
officer issues a delivery order to the contractor,
this constitutes an order for services and also an
agreement to pay for the services.
Because the contractor must staff to meet the delivery
order requirements, the government may have to pay the
contractor for all classes listed on the delivery
order, even if those classes are not taught.
A class or classes may be canceled before or after the
convening date; however, the contracting officer may
be required to negotiate a settlement with the
contractor for costs incurred. It is imperative that
the COR advise the contracting officer of any such
class cancellations as soon as possible to defray any
costs incurred by the contract.
Firm-fixed price requirements type contracts for
instructional services place a large responsibility on
training managers to ensure that the information on
delivery orders is correct. The responsibility starts when
the class schedules are originally prepared and approved
for entry into CeTARS. If the class schedule is NOT based
on the number of students to be trained and class size
requirements, the Navy could spend money needlessly.
Example: If 100 students are to be trained in the welding
course in the next FY and the class size is limited to 10
students, the training manager should ensure that 10
classes of the welding course are scheduled for the next
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NAVEDTRA 135C