[Code of Federal Regulations]

[Title 48, Volume 1]

[Revised as of October 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 48CFR16.202-1]



[Page 305]

 

            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 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]