Use of Fixed-Price Incentive Firm (FPIF) Contracts in Development and Production

The choice of appropriate contract types is very situationally dependent, and a number of factors must be taken into account to determine the best contract type to use. From the perspective of both industry and the government, it makes a good deal of difference whether the Defense Department asks for Cost type, Fixed-Price Incentive FPI, or Firm Fixed Price FFP proposals. In the original Better Buying Power BBP initiatives, although Dr. Carter and I encouraged greater use of FPI, we also included the caveat where appropriate. BBP 2.0 modifies this guidance to stress using appropriate contract types while continuing to encourage use of FPI for early production.