Which contract type specifies that price is adjusted up or down at a stated time during the contract using a pre-selected method?

Which contract type specifies that price is adjusted up or down at a stated time during the contract using a pre-selected method?

• A. Fixed Price Re-determination
• B. Price In Effect At Time Of Shipment
• C. Cost Plus Fixed Fee
• D. Proposal Risk

Answer: (A)

Price adjustments at predetermined times using a pre-selected method describe how a fixed-price re-determinable contract works. In this setup, the price starts fixed, but at defined review points the price is re-determined according to a formula or index that both parties agreed to before signing. This keeps the overall structure as fixed-price while allowing adjustments to reflect changes in costs, inflation, or other economic factors; the price can move up or down based on the chosen method. The other options don’t fit because they describe different pricing approaches: price determined only at shipment, cost-plus pricing with a fixed fee, or pricing concerns related to proposal risk, none of which provide a scheduled, pre-set mechanism to adjust the price up or down during the contract.

Price adjustments at predetermined times using a pre-selected method describe how a fixed-price re-determinable contract works. In this setup, the price starts fixed, but at defined review points the price is re-determined according to a formula or index that both parties agreed to before signing. This keeps the overall structure as fixed-price while allowing adjustments to reflect changes in costs, inflation, or other economic factors; the price can move up or down based on the chosen method. The other options don’t fit because they describe different pricing approaches: price determined only at shipment, cost-plus pricing with a fixed fee, or pricing concerns related to proposal risk, none of which provide a scheduled, pre-set mechanism to adjust the price up or down during the contract.