Federal activity overview — Fixed-Price Prospective Price Redetermination
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Provides for a firm fixed price for an initial period and prospective redetermination of the price for subsequent periods based on updated cost data. The initial period must be the longest period for which fair and reasonable pricing can be negotiated.
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FAR 16.205
Used in quantity production or services contracts when it is possible to negotiate a fair price for initial periods but not for subsequent periods. Typically used for multi-year production runs.
Advantages: Enables long-term contracts when full pricing is uncertain, prices adjust to actual conditions. Disadvantages: Price negotiation at each redetermination point, potential for disagreement.
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Bureauify. (2026). Fixed-Price Prospective Price Redetermination — Federal Contract Intelligence. Bureauify Federal Intelligence. Retrieved , from https://bureauify.com/glossary/fixed-price-prospective-price-redetermination
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