Prices do not change during the term of the contract.

Prices do not change during the term of the contract.

• A. Firm fixed price
• B. Fixed price with re-determination
• C. Open Market Procurement
• D. Incentive contract

Answer: (A)

Prices do not change during the term of the contract are characteristic of a firm fixed-price arrangement. In this type, a single price is set for the entire contract period and remains unchanged regardless of changes in the contractor’s costs or market conditions. The buyer gains price certainty, while the contractor bears the risk of any cost overruns or savings. The other options involve price adjustments under certain conditions: a fixed-price with re-determination allows changes after a set period or event; open market procurement is a purchasing method rather than a contract type with a fixed price; and an incentive contract includes performance-based targets that can influence cost and price, not a guaranteed fixed price for the duration.

Prices do not change during the term of the contract are characteristic of a firm fixed-price arrangement. In this type, a single price is set for the entire contract period and remains unchanged regardless of changes in the contractor’s costs or market conditions. The buyer gains price certainty, while the contractor bears the risk of any cost overruns or savings.

The other options involve price adjustments under certain conditions: a fixed-price with re-determination allows changes after a set period or event; open market procurement is a purchasing method rather than a contract type with a fixed price; and an incentive contract includes performance-based targets that can influence cost and price, not a guaranteed fixed price for the duration.