Section 3-122-136 - Fixed-price contract(a) The fixed-price contract is the only type of contract that can be used in competitive sealed bidding. It places responsibility on the contractor for the delivery of the goods or the complete performance of the services or construction in accordance with the contract terms at a price that may be firm or may be subject to contractually specified adjustments. It is appropriate for use when the extent and type of work necessary to meet the purchasing agency's requirements can be reasonably specified and the cost can be reasonably estimated, as is generally the case of construction or standard commercial products.(b) The firm fixed-price contract is one type of fixed-price contract. It provides a price that is not subject to adjustment due to variations in the contractor's cost of performing the work specified in the contract. It should be used whenever prices which are fair and reasonable to the purchasing agency can be established at the outset. Bases upon which firm fixed prices may be established include: (1) Adequate price competition for the contract;(2) Comparison of prices in similar prior procurement in which prices were fair and reasonable;(3) Establishment of realistic costs of performance by utilizing available cost or price data and identifying certainties in contract performance; or(4) Use of other adequate means to establish a firm price.(c) The fixed-price contract with price adjustment Is another type of fixed-price contract. It provides for variation in the contract price under special conditions defined in the contract, other than customary provisions authorizing price adjustments due to modifications to the work. The formula or other basis by which the adjustment in contract price can be made shall be specified in the solicitation and the resulting contract. Adjustment allowed may be upward or downward only or both upward and downward.(d) Examples of conditions under which adjustments may be provided are: (1) In fixed-priced contracts: (A) Changes in the contractor's labor agreement rates as supplied to industry or area wide; or(B) Changes due to rapid and substantial price fluctuations, which can be related to an accepted index; and(2) In requirements contracts: (A) When a general price change applicable to all customers occurs; or(B) When a general price change alters the base price, as a change in a manufacturer's price to which a fixed discount is applied pursuant to the contract to determine the contract price.[Eff 12/15/95; comp 11/17/97; am and comp MAR 21 2008] (Auth: HRS §§ 103D-202, 103D-313) (Imp: HRS § 103D-313)