FFP-EP

Firm Fixed Price with Economic Price Adjustment is a contract type combining a firm fixed price with provisions for adjusting the price based on specified economic indicators. FFP-EP provides price certainty while accommodating economic fluctuations over contract duration.

FFP-EP is appropriate for longer-term contracts where inflation risk would otherwise require excessive price contingencies. Understanding FFP-EP mechanics helps contractors develop appropriate pricing strategies. FFP-EP adjustments follow contract-specified formulas tied to labor indices, material costs, or published price lists.