2-18.1 Contract Selection Factors Numerous factors guide the selection of the best contract type for a given purchase. Factors to be considered when determining the contract type include: Realism of cost estimate (either through price or cost analysis). Extent of competition (results in realistic pricing). Risks and uncertainties. Type and complexity of the requirement(s). Adequacy and firmness of specifications. Likelihood of changes. Past experience with industry, suppliers, and requirements. Extent of subcontracting. Adequacy of the supplier’s estimating and accounting system. Urgency of the requirement. Volatility of cost factors (e.g., unstable labor or market conditions). Period of performance or length of production run. Business practices in industries, trades, or professions. Concurrent contracts (if performance under the proposed contract involves concurrent operations under other contracts, the impact of those contracts should be considered).