Common Contracts

1 similar Fixed Price Contract contracts

Fixed rate contract
Fixed Price Contract • August 29th, 2021

A fixed price contract is a type of contract in which the amount of payment does not depend on the resources used or by the time spent. This is contrary to a cost-plus contract, which aims to cover costs with a further profit made. This scheme is often used by military and government contractors to put the risk on the side of the seller and control costs. However, historically when such contracts are used for new innovative projects with non-tested or unbalanced technologies, such as new military transports or furtive attack plans, can often translate into a failure if the costs higher than overcoming the contractor's ability to absorb Unexpected costs. Fixed prices can take more time, in advance, for sellers to determine the price of each article. However, fixed price items can be purchased faster, but bargaining could set the price for an entire set of purchased elements, reducing time for such mass purchases treated as an entire batch. Furthermore, fixed price items can help pre-det