fixed price contract
Definition
Contract that provides for a price which normally is not subject to any adjustment unless certain provisions (such as contract change, economic pricing, or defective pricing) are included in the agreement. These contracts are negotiated usually where reasonably definite specifications are available, and costs can be estimated with reasonable accuracy. A fixed price contract places minimum administrative burden on the contracting parties, but subjects the contractor to the maximum risk arising from full responsibility for all cost escalations. Also called firm price contract.
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fixed price contract is in the Agreements & Contracts and Purchasing & Procurement subjects.
fixed price contract appears in the definitions of the following terms: firm fixed price contract, contract risk, fixed price incentive contract, firm price contract and contract categories
fixed price contract appears in these other terms: fixed price contract with price escalation, fixed price contract with economic price adjustment, fixed price contract with provision for re-determination of price
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