Which party to a contract absorbs the majority of cost risk when a Firm-Fixed-Price (FFP)contract is used?
A) the seller
B) the buyer
C) the cost risk is equally shared.
D) the insurer

Question

Which party to a contract absorbs the majority of cost risk when a Firm-Fixed-Price (FFP)contract is used?​ 
A) the seller 
B) the buyer 
C) the cost risk is equally shared. 
D) the insurer

Quizplus · Accepted Answer

In a Firm-Fixed-Price (FFP) contract, the seller (or contractor) agrees to provide goods or services at a set price. This means the seller bears the majority of the cost risk because they are responsible for completing the work within the agreed-upon price, regardless of any unexpected increases in costs.

Which Party to a Contract Absorbs the Majority of Cost