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

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

• A. Firm Fixed Price (FFP) Contract
• B. Cost-Plus-Award-Fee (CPAF) Contract
• C. Cost-Plus-Incentive-Fee (CPIF) Contract
• D. Fixed Price Award Fee (FPAF) Contract

Answer: (A)

Firm Fixed-Price contracts lock in a single price for the work, so the total amount paid is fixed and not subject to adjustment based on actual costs or performance outcomes. The contractor bears the risk of cost overruns and must manage resources efficiently; only formal contract modifications can change the price if the scope changes. In contrast, cost-reimbursement types require the buyer to cover allowable costs plus a fee that can vary with performance (or with cost outcomes), so the price isn’t fixed. Even a Fixed Price with an Award Fee still centers on a fixed base price, while the final payment can depend on the award fee earned, making the overall arrangement not truly fixed in the same way. Therefore, the contract type where the price is fixed and not subject to change is the Firm Fixed-Price contract.

Firm Fixed-Price contracts lock in a single price for the work, so the total amount paid is fixed and not subject to adjustment based on actual costs or performance outcomes. The contractor bears the risk of cost overruns and must manage resources efficiently; only formal contract modifications can change the price if the scope changes. In contrast, cost-reimbursement types require the buyer to cover allowable costs plus a fee that can vary with performance (or with cost outcomes), so the price isn’t fixed. Even a Fixed Price with an Award Fee still centers on a fixed base price, while the final payment can depend on the award fee earned, making the overall arrangement not truly fixed in the same way. Therefore, the contract type where the price is fixed and not subject to change is the Firm Fixed-Price contract.