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

Firm-fixed-price (FFP) and time-and-materials (T&M) contracts are two different types of agreements often entered into by the government and contractors in Washington. A FFP contract is a type of contract where the price for the agreement is set and fixed. This means that the contractor and the government agree to a price before work begins, and that price will not change regardless of any additional costs, changes in the scope of the project, or any delays that might occur. This type of contract ensures that the project will stay within a certain budget and all parties know what to expect throughout the project. A T&M contract is a type of agreement where the contractor works for a certain amount of time and receives payments based on the amount of materials used. This type of contract is more flexible and allows for changes throughout the project, since payments are not determined until work is completed. However, with a T&M contract, the total costs are difficult to estimate and can quickly escalate, so this type of contract is generally used for short-term projects and for those where it is not possible to assign a fixed price. In summary, FFP contracts ensure a fixed price, while T&M contracts offer more flexibility but with potential cost overruns. Both types of contracts are used in government contracts in Washington, depending on the needs of the project.

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

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