Which of the following is true when selecting a contract type?

When selecting a contract type, it is crucial to choose one that results in reasonable contract risk, which is why this option is correct. The primary goal in contract selection is to balance the risks and benefits associated with project performance, ensuring that both the government and the contractors are protected and fairly treated. A reasonable contract risk means that the associated responsibilities, liabilities, and uncertainties are managed and allocated effectively, allowing for successful project execution and completion.

Selecting a contract with maximum risk would create an unstable environment, potentially discouraging qualified contractors from participating. This could lead to difficulties in obtaining bids and could adversely affect project outcomes. Likewise, prioritizing speed over cost might lead to rushed decisions and overlooked essential elements of risk management, resulting in financial misalignments and potential failures. Ensuring equal profits for all contractors is not typically a goal of contract selection; rather, the focus is on achieving fair and equitable pricing that reflects the scope and complexity of the work involved.