What does FFP mean in contracting?
What does FFP mean in contracting?
16.202-1 Description. A firm-fixed-price contract provides for a price that is not subject to any adjustment on the basis of the contractor’s cost experience in performing the contract. This contract type places upon the contractor maximum risk and full responsibility for all costs and resulting profit or loss.
What is FFP project?
Firm Fixed Price (FFP) contracts specify: • A specific scope of the work to be performed; typically includes: – Discreet deliverables (e.g., training plan, software delivery) – Acceptance terms.
What is FFP level of effort?
Firm-fixed-price, level-of-effort term contracts (16.207): A firm-fixed-price, level-of-effort term contract requires The contractor to provide a specified level of effort, over a stated period of time, on work that can be stated only in general terms; and the Government to pay the contractor a fixed dollar amount.
What is a fixed-price incentive fee contract?
A fixed-price incentive contract is a fixed-price contract that provides for adjusting profit and establishing the final contract price by application of a formula based on the relationship of total final negotiated cost to total target cost.
What is the full form of FFP?
Fresh Frozen Plasma (FFP)
Is lump sum and fixed-price the same?
A stipulated sum contract, also called a lump sum or fixed price contract, is the most basic form of agreement between a contractor and owner. This contract should be used if the scope and schedule of the project are appropriately defined to allow the contractor to fully estimate project costs.
How does a time-and-materials contract work?
How do time and materials contracts work? Time and materials contracts specify the scope of a project but are open-ended. They set out prices for materials and hourly rates for labor, and the client is billed at those rates for as many hours and as much material as is required to complete the project.
What are the disadvantages of fixed-price contracts?
Disadvantages of fixed-price
- Lack of flexibility. A fixed-price project has a defined scope (requirements).
- Writing specifications is hard and takes a lot of time.
- Wasted time negotiating change.
- Less client involvement.
When should a fixed-price incentive contract be considered?
A fixed-price incentive (firm target) contract is appropriate when the parties can negotiate at the outset a firm target cost, target profit, and profit adjustment formula that will provide a fair and reasonable incentive and a ceiling that provides for the contractor to assume an appropriate share of the risk.