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welcome to act notes tutorials my name is alice and i am going to give you a quick tutorial on firm fixed price contracts or what we call ffp what is a firm fixed price contract a firm fixed price contract provides for a price that is not subject to any adjustment on the basis of the contractors cost experience in performing the contract a firm fixed price contract falls under federal acquisition regulation 16.2 this contract type places upon the contractor maximum risk and full responsibility for all costs and resulting profit or loss it also provides maximum incentive for the contractor to control costs and perform effectively and imposes a minimum administrative burden upon the contracting parties when should you use a firm fixed price contract a firm fixed price contract should be used for acquiring commercial items supplies or services on the basis of defined requirements when the contracting officer can establish fair and reasonable prices at the outset it is best to use a firm
