Disadvantages of Fixed Price Contract

Disadvantages of Fixed Price Contract include:

• Seller may under-price the work and try to make up profits on change orders
• Seller may not complete some of the contract statement of work if they begin losing money
• More work for buyer to write the contract statement of work
• Can be more expensive than Cost Reimbursable Contract if the contract statement of work is incomplete
• Seller will need to add to the price for their increase of risk