ABSTRACT
There are five elements that define a contract: offer, acceptance, exchange, capacity, and legality. One of the key principles of a contract is consideration. Something must bind the contract, and that is consideration. It may be an exchange of goods, services, or money. There are really only two basic types of contracts: fixed price and cost reimbursable. All other contracts are a hybrid of these two types. A fixed price contract is just that, a contract in which the price is fixed. The price is given and accepted with understanding that it will not change throughout the contract, unless there are specific, agreed upon reasons for the change. The premise of a cost reimbursable contract is that all costs of the contract are collected, documented, and submitted for reimbursement. There are two elements for organizing for contracting: centralized or decentralized. The final aspects and responsibilities of contracting/procurement process are administering and closing out the contract.
