FFP-LOE

Firm Fixed Price – Level of Effort is a contract type requiring the contractor to provide a specified level of effort over a stated period for a fixed price. FFP-LOE contracts pay for effort rather than deliverables, with the government accepting risk that effort may not achieve desired outcomes.

FFP-LOE is appropriate when work cannot be defined in terms of specific end products. Understanding FFP-LOE characteristics helps contractors price and manage level-of-effort requirements. FFP-LOE requires accurate effort tracking and may involve specific labor category and hour requirements.