FAR 36.208—Concurrent performance of firm-fixed-price and other types of construction contracts.
Plain-English Summary
FAR 36.208 addresses when the Government may use different pricing arrangements at the same construction work site at the same time. Its core subject is the concurrent performance of firm-fixed-price, lump sum, or unit price construction contracts alongside cost-reimbursement or other contracts that include cost variation or cost adjustment features, such as cost-plus-fixed-fee or price-incentive contracts. The rule exists because mixing these contract types on the same site can create labor relations problems, administrative confusion, and disputes over responsibility, sequencing, access, and cost allocation. In practice, this section tells contracting personnel that such mixed contract structures are generally prohibited unless the head of the contracting activity gives prior approval. For contractors, it signals that site coordination and pricing structure can affect whether a project is even permissible under the acquisition plan. For agencies, it is a control on contract strategy designed to reduce operational risk and protect the integrity of construction performance at a shared site.
Key Rules
Mixed contract types are restricted
The Government may not ordinarily let cost-plus-fixed-fee, price-incentive, or other contracts with cost variation or cost adjustment features run concurrently at the same work site with firm-fixed-price, lump sum, or unit price contracts. The restriction applies specifically to concurrent performance at the same site, not merely to different contracts in the abstract.
Prior approval is required
An exception is allowed only if the head of the contracting activity approves the arrangement in advance. This means the contracting officer cannot unilaterally authorize the mixed contract structure when the rule applies.
Applies to construction work sites
The section is aimed at construction contracting and the practical problems that arise when multiple contractors with different pricing incentives operate in the same physical area. The concern is not just pricing theory, but on-site labor and administration issues.
Purpose is to avoid labor and administrative problems
The rule is preventive. It recognizes that different contract types can create tension over work sequencing, supervision, access, productivity, and cost responsibility, so the default position is to avoid concurrent use unless higher-level approval justifies it.
Responsibilities
Contracting Officer
Structure the acquisition to avoid prohibited concurrent contract types at the same work site unless prior approval is obtained. The contracting officer must identify when the rule is triggered and ensure the required approval is in place before award.
Head of the Contracting Activity
Review and approve, in advance, any proposed exception allowing cost-reimbursement, price-incentive, or similar cost-adjustment contracts to run concurrently with firm-fixed-price, lump sum, or unit price contracts at the same site.
Agency
Establish internal controls and oversight to prevent unauthorized mixed contract arrangements and to ensure that any exception is justified by the operational need and approved at the proper level.
Contractor
Understand that site access, coordination, and performance may be affected by the Government’s contract-type restrictions. Contractors should raise concerns early if the solicitation or site plan suggests concurrent mixed contract performance that may require special approval or coordination.
Practical Implications
This rule can affect acquisition planning early, because the Government may need to separate work into different phases, sites, or contract structures to avoid a prohibited overlap.
A common pitfall is assuming that different contract types can be used together simply because they cover different scopes; the key issue is whether they will operate concurrently at the same work site.
Another risk is failing to obtain the required prior approval before award, which can create compliance problems and force a restructuring of the procurement.
Contracting teams should document the site-specific rationale if they believe an exception is necessary, including why the mixed arrangement is unavoidable and how labor or administrative issues will be managed.
Contractors should watch for coordination burdens, access conflicts, and schedule interference when multiple prime contracts are active at one site, especially where one contract’s pricing structure may create different incentives than another.
Official Regulatory Text
In view of potential labor and administrative problems, cost-plus-fixed-fee, price-incentive, or other types of contracts with cost variation or cost adjustment features shall not be permitted concurrently, at the same work site, with firm-fixed-price, lump sum, or unit price contracts except with the prior approval of the head of the contracting activity.