Mississippi Administrative Code
Title 12 - Finance and Administration
Part 6 - Office of Purchasing, Travel and Fleet Management
Chapter 3 - Source Selection and Contract Formation
Sec2 12-6-3.116 - Types of Contracts
Sec2 12-6-3.116.04 - Types of Fixed-Price Contracts
Section 12-6-3.116.04.1 - General

A fixed-price contract places responsibility on the contractor for the delivery of the commodity or equipment in accordance with the contract terms at a price that may be firm or may be subject to contractually specified adjustments. The fixed-price contract is appropriate for use when the extent and type of work necessary to meet requirements can be reasonably specified and the cost can be reasonably estimated, as is generally the case for construction or standard commercial products. A fixed-price type of contract is the only type of contract that can be used in competitive sealed bidding.

Commentary

Fixed-price contracts are preferred for use in procurements and should be used whenever possible. However, when risks are unknown or not readily measurable in terms of cost, the use of such contracts can result in inflated prices and inadequate competition; poor performance, disputes, and claims when performance proves difficult; or excessive profits when anticipated contingencies do not occur.