---
title: "Structure budgets and contracts to support delivery"
source: USDS Digital Services Playbook
source_url: https://github.com/usds/playbook
licence: CC0-1.0
domain: product-and-design
subdomain: usds-playbook
date_added: 2026-04-25
---

To improve our chances of success when contracting out development work, we need to work with experienced budgeting and contracting officers. In cases where we use third parties to help build a service, a well-defined contract can facilitate good development practices like conducting a research and prototyping phase, refining product requirements as the service is built, evaluating open source alternatives, ensuring frequent delivery milestones, and allowing the flexibility to purchase cloud computing resources.

[The TechFAR Handbook](https://techfarhub.cio.gov/handbook/) provides a detailed explanation of the flexibilities in the Federal Acquisition Regulation (FAR) that can help agencies implement this play.

### Checklist
1. Budget includes research, discovery, and prototyping activities
2. Contract is structured to request frequent deliverables, not multi-month milestones
3. Contract is structured to hold vendors accountable to deliverables
4. Contract gives the government delivery team enough flexibility to adjust feature prioritization and delivery schedule as the project evolves
5. Contract ensures open source solutions are evaluated when technology choices are made
6. Contract specifies that software and data generated by third parties remains under our control, and can be reused and released to the public as appropriate and in accordance with the law
7. Contract allows us to use tools, services, and hosting from vendors with a variety of pricing models, including fixed fees and variable models like “pay-for-what-you-use” services
8. Contract specifies a warranty period where defects uncovered by the public are addressed by the vendor at no additional cost to the government
9. Contract includes a transition of services period and transition-out plan

### Key Questions
- What is the scope of the project? What are the key deliverables?
- What are the milestones? How frequent are they?
- What are the performance metrics defined in the contract (e.g., response time, system uptime, time period to address priority issues)?
