What are the differences between firm-fixed-price and time-and-materials contracts?

Firm-fixed-price contracts and time-and-materials contracts are two types of contracts used in government contracts law in New Hampshire. Both types of contracts are used to purchase goods and services between parties, but they have some important differences. A firm-fixed-price contract sets a predetermined price for the good or service that is agreed to by both parties before the work begins. In this type of contract, the buyer pays the agreed-upon price regardless of the actual costs incurred in completing the project. Time-and-materials contracts are a bit different. In this type of contract, the buyer will pay for the materials and the time required to complete the project, and the cost of the project can increase or decrease depending on how much material and time is needed. The agreed-upon price for the work is flexible, and the buyer is responsible for any additional costs that arise. Both types of contracts have their advantages and disadvantages. Firm-fixed-price contracts are beneficial because the buyer knows the amount they will pay upfront. This type of contract may be more attractive to sellers as it reduces the risk of financial losses. Time-and-materials contracts may be the better choice for a buyer when the final cost of the project is uncertain or if there are changes along the way. Overall, understanding the differences between firm-fixed-price and time-and-materials contracts is important for buyers and sellers alike when engaging in government contracts law in New Hampshire.

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What are the differences between firm-fixed-price and time-and-materials contracts?

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