A summary of the research and important findings are presented in the conclusion. Benefits and drawbacks of fixed-price contracts from the perspective of a contractor There are as many as 20 different types of defense contracts currently in use, and identifying the respective risks that are associated with cost overruns allows them to be categorized into two general groups: (a) fixed price contracts and (b) cost reimbursement (Diltz, 1999)
As Erwin points out, though, "The policy ignores history. This is a shortsighted move that only creates incentives for contractors to bid low and after winning, try to maximize changes in the program as technology or threats evolve" (Erwin, 2010, p
637). With fixed-price contracts, suppliers mutually agree to provide a certain quantity of materials and services at a preset price (Weber, 2001)
"The agency's decision to choose a lower priced and more technically inferior proposal is a business decision that GAO tends not to question. Unless you can show that the agency failed to follow the solicitation criteria, you bid protest may not be fruitful" (Watson 2015)