What are the differences between fixed-price and cost-reimbursement contracts?

Fixed-price contracts and cost-reimbursement contracts are two distinct types of government contracts in New Hampshire. A fixed-price contract is a type of contract that requires the contractor to complete the work for a pre-agreed upon fixed price. This means that the contractor is responsible for any cost overruns and may not be able to bill the government for any additional costs. On the other hand, a cost-reimbursement contract is a type of contract that requires the contractor to complete the work for a price that is based on either the actual costs incurred or an estimate of the costs incurred. Under this type of contract, the government will reimburse the contractor for any additional costs that are incurred. Fixed-price contracts create more risk to the contractor, as the contractor is responsible for any cost overruns. These contracts also provide more certainty to the government, as the price is fixed and the contractor is not able to seek additional reimbursement. Cost-reimbursement contracts provide less certainty to the government, as the cost of the project is unknown until the project is complete. These contracts also create less risk to the contractor, as the contractor can seek reimbursement for any cost overruns or additional costs that were not in the original estimate.

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What are the differences between fixed-price and cost-reimbursement contracts?

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