For R&D, Fixed-Price Contracts Pose High Risks

Law360, New York (October 27, 2010, 11:48 AM EDT) -- As the U.S. government seeks to expand its use of fixed-price contracts, contractors should be wary of cost overruns and not be afraid to don their green eyeshades when the government comes calling for changes, attorneys said.

While a fixed-price structure is often suitable for production work, the U.S. has also started using it in research and development contracts, which involve a high level of uncertainty that can make it tough for contractors to estimate their costs.

The $35 billion solicitation for the U.S. Air Force's...
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