Roofing contractors working in the private sector customarily operate on the basis of lump sum contracts with general contractors or building owners. Similarly, roofing contractors who regularly perform reroofing of schools and other local public buildings also perform work in accordance with a fixed and firm written contract, including an agreed upon price, that is established when the contract is executed. Regardless of whether the project is competitively bid or privately negotiated, the scope of work the contractor is going to perform is defined, the location of the work is certain, and the time when the work is to be performed is generally, if not precisely, known and binding.
Contracting with the federal government can be quite different. Federal government contracting historically has been the province of a separate cadre of contractors who work primarily in that market and have successfully mastered the practice of contracting profitably with federal government agencies. The federal government uses many types of contracts to purchase products and services. One contract the federal government uses for procuring goods and services is "indefinite delivery" contracts. This method of contracting was initiated by the Department of Defense (DOD) in 1981 for use by the North Atlantic Treaty Organization. Indefinite delivery contracts have been used routinely by DOD departments and other federal agencies for a variety of procurements, including construction, maintenance, repairs, architectural and engineering services.
Unlike traditional construction contracts, the distinguishing feature of indefinite delivery contracts is the scope of work, location of work and time of work to be performed are not specifically established when the initial contract is executed. At the federal government level, indefinite delivery contracting is governed by Federal Acquisition Regulations, commonly known as FARs.
Types of contracts