D.C. Mun. Regs. r. 50-5026
Fixed price contracts include several variants:
Unlike cost reimbursement contracts, any type of fixed price contract obligates the contractor to complete the contractually-specified work for a fixed price.
A firm fixed price contract provides for a price that is not subject to adjustment, except in the event of a change to the scope of work.
A fixed price contract with economic price adjustment provides for an upward or downward adjustment in the stated contract price based on changes in certain benchmarks specifically identified in the contract (for example, catalog prices, the producer price index for a particular commodity, or a recognized index for the price of legal services), subject to a ceiling on upward adjustments.
A fixed price incentive contract generally provides for establishing a final price by applying a formula based on the relationship between the total cost actually incurred by the contractor and a total target cost. A fixed price incentive contract results in the parties sharing in the cost savings or increases associated with differences between the actual and target cost. These contracts also can include incentive formulas based on the contractor's schedule or technical performance.
A fixed unit price contract establishes fixed prices for a unit of services, materials or a combination of both. The units are known and definable but the actual quantity to complete the requirement cannot be determined in advance with certainty. The contract may contain an estimated quantity but must include a ceiling amount. Unlike a requirements contract, multiple fixed unit price contracts for the same work can be awarded.
A fixed price plus award fee contract establishes a firm fixed price for services and provides an additional profit or fee amount that may be awarded, in whole or in part, based upon periodic evaluations of ongoing contractor performance. The award fee determination is subjective, made unilaterally by the Contracting Officer, and is not subject to the Disputes clause procedures.
D.C. Mun. Regs. r. 50-5026