Stating the obvious – fixed price contracts, in their essence, are when you agree to perform services or provide goods for a fixed price.  Carrying this through – if cost of performance increases – the contractor cannot increase the price – it’s a fixed price contract.  Similarly, if cost of performance goes down, the government...

According to FAR Part 16, the Federal Government uses fixed-price contracts when it wants to place most of the risk and responsibility for performance on the contractor. This means that fixed-price contracts are generally not subject to being adjusted as a result of the contractor’s costs or profits increasing or decreasing in performance. As a...