Which contract type has the price set and not subject to change?

Which contract type has the price set and not subject to change?

• A. Indefinite Delivery Contracts
• B. Time-and-Materials contracts
• C. Fixed-Price contracts
• D. Cost Reimbursement contracts

Answer: (C)

Price certainty is the key idea here. In a fixed-price contract, the price is established at the outset and does not change for the defined scope of work, so the buyer knows the total cost upfront and the seller bears the risk of cost overruns. Only the price can change if there’s a formal modification to the scope or an approved economic-price adjustment, not because costs naturally rise during performance. This differs from other contracts where the total can vary: an indefinite delivery contract covers unknown quantities or delivery times and may involve price changes as needs are defined; time-and-materials contracts bill for actual hours and materials at set rates, so the total can fluctuate; and cost-reimbursement contracts reimburse actual costs plus fee, so the price isn’t fixed.

Price certainty is the key idea here. In a fixed-price contract, the price is established at the outset and does not change for the defined scope of work, so the buyer knows the total cost upfront and the seller bears the risk of cost overruns. Only the price can change if there’s a formal modification to the scope or an approved economic-price adjustment, not because costs naturally rise during performance. This differs from other contracts where the total can vary: an indefinite delivery contract covers unknown quantities or delivery times and may involve price changes as needs are defined; time-and-materials contracts bill for actual hours and materials at set rates, so the total can fluctuate; and cost-reimbursement contracts reimburse actual costs plus fee, so the price isn’t fixed.