A Firm Fixed Price (FFP) contract specifies a single, immutable price for the delivery of a defined product or service, regardless of the actual costs incurred by the vendor. This contractual model transfers the entire cost risk associated with project execution from the buyer to the service provider. It offers budgetary certainty to the procuring entity.
Mechanism
The FFP mechanism operates on a clear agreement of deliverables and payment amount established at the outset of a project. The vendor assumes responsibility for managing all expenses, labor, and resources required to meet the agreed scope within the fixed price. Any cost overruns become the vendor’s liability, incentivizing efficient resource allocation and strict project management.
Methodology
In the crypto technology space, this contractual methodology is strategically applied for projects with well-defined scopes and low technical uncertainty, such as specific smart contract audits, security assessments, or targeted infrastructure deployments. It is favored by institutional clients seeking predictable expenditure and clear accountability from external service providers, allowing for better budget control and risk transference.
The core challenge of an agile RFP is evolving the procurement system from a static, document-based transaction to a dynamic, collaborative partnership.
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