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Understanding Contract Types: Based on Scope Clarity1. Fixed Scope = Fixed Price ContractsWhen the scope is 100% clear, timeline and deliverables are locked: • Firm-Fixed Price (FFP):All costs and scope fixed.Ex: Build a wall for $5,000. • Fixed Price Incentive Fee (FPIF):Bonus for early or under-budget delivery.Ex: “Finish early, get a bonus.” • Fixed Price w/ Economic Price Adjustment (FPEPA):Adjusts for inflation/commodity prices.Ex: 2-year oil-sensitive contract.⸻2. Variable Scope = Flexible
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