Fixed-price contract

A fixed-price contract, also called a fixed bid, names one total for a defined scope. The scope is the key. Anything outside it, or any item left open, can still change the price.

The National Association of Home Builders describes a fixed bid as a bid that tells you exactly how much you will pay for a finished home by a set date. Open items are often covered by an allowance, and later changes need a change order. Compare it with a cost-plus contract. See the cost to build a custom home in Tampa for how contracts affect budgets.