[Code of Federal Regulations]
[Title 48, Volume 1]
[Revised as of October 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 48CFR16.202-1]

[Page 294-295]
 
            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
 
                CHAPTER 1--FEDERAL ACQUISITION REGULATION
 
PART 16_TYPES OF CONTRACTS--Table of Contents
 
                   Subpart 16.2_Fixed-Price Contracts
 
Sec.  16.202-1  Description.

    A firm-fixed-price contract provides for a price that is not subject 
to any adjustment on the basis of the contractor's cost experience in 
performing the contract. This contract type places upon the contractor 
maximum risk and full responsibility for all costs and resulting profit 
or loss. It provides maximum incentive for the contractor to control 
costs and perform effectively and imposes a minimum administrative 
burden upon the contracting parties. The contracting officer may use a 
firm-fixed-price contract in conjunction with an award-fee incentive 
(see 16.404) and performance or delivery incentives (see 16.402-2 and 
16.402-3) when the award fee or incentive is based solely on factors 
other than cost. The

[[Page 295]]

contract type remains firm-fixed-price when used with these incentives.

[48 FR 42219, Sept. 19, 1983, as amended at 68 FR 13201, Mar. 18, 2003]