We are all familiar with firm-fixed-price (FFP) contracts; that’s what we enter into when we buy an item such as a book or a meal for a specified price. In government contracting, several types of fixed-price contracts are used. For example, unlike in the commercial sector, government contracting provides for a fixed-price contract that allows for price adjustments under certain circumstances. FAR 16.201. The following contract types fall within the family of fixed-price government contracts: firm-fixed price (FFP), fixed-price-with-economic-price-adjustment (FPEPA), fixed-price-level-of-effort (FPLOE), fixed-price redetermination-prospective (FPRP), and fixed-price redetermination-retroactive (FPRR).
Although fixed-price contracts are used ...
