The statement of work in a cost-reimbursement contract is generally broader or more ambiguous than that of a
fixed-price contract. This situation often leads to the accomplishment of work that is within the general scope of the contract but that is not contemplated in the contractor's proposal.
Most remodelers working with
fixed-price contracts pay attention to costs just long enough to price and sell the job.
The spokesman said the stadium contract was the most damaging of a number of
fixed-price contracts signed in the 1990s by a variety of companies when competition for high-profile projects was intense and buyers were able to dictate terms.
Fixed-price contracts also make customers more comfortable.
Although a
fixed-price contract guarantees the government only what it actually bargained for, government buyers always want more.
Comment: Many government contractors have claimed research credits under the type of
fixed-price contract involved in Fairchild, based on analysis similar to that propounded by the taxpayer.
I am not willing to pay a large premium for a guaranteed
fixed-price contract if the risk analysis reflects that there is a big risk because we don't know what's there."
