What are the two main categories of contracts?

• A. Sealed bid and Negotiated
• B. Fixed Price and Cost Reimbursement
• C. Government and Commercial
• D. Short-term and Long-term

Answer: (C)

Contracts are categorized by who the customer is: Government contracts versus Commercial contracts. This distinction matters because government contracts follow federal procurement rules (like FAR/DFARS), involve formal competitive procedures, and include specific terms and oversight. Commercial contracts are private-sector agreements between entities and generally follow standard commercial practices with fewer government-specific requirements. The other descriptions refer to how a contract is awarded, how it’s priced, or how long it lasts, not who the contract is with, so they don’t define the main categories in this context.