Federal contracting processes are notoriously rigid and regimented, which is not always the most effective approach in today’s fast-moving world. Firm fixed-price (FFP)contracts are especially favored because they provide predictability in cost and give the agency more control over the specific methods the contractor may use to meet the contract’s goals.
Despite those advantages, these contracts also lock the parties into solutions envisioned at the inception of the contract, and making changes to meet fluctuating circumstances is itself a cumbersome process.
Across the government, federal agencies are trying to make contracts more flexible and agile, enabling faster adjustments, incorporating Agile methodology into their acquisition processes. Government policymakers, including the Federal Acquisition Institute (FAI) and the General Services Administration, are facilitating this effort. The Federal Acquisition Regulation (FAR) handbook also includes guidance for contracting in an Agile environment.
Importantly, agencies can use existing federal contract types within an Agile setting by making some modifications. This paper presents some ideas and approaches to apply FFP contracts to Agile projects.