Glossary · Definition
Fixed price
Fixed price is a contract model where the vendor delivers an agreed scope for an agreed amount, carrying the estimate risk.
By Nythrex EngineeringUpdated 1 min read
In plain words
Fixed price gives budget certainty for well-defined work. With uncertain scope, the vendor prices in risk as padding, and every ambiguity becomes a negotiation. It works best for small, clear pieces of work — or after discovery has made scope genuinely clear.
When it matters to you
- Small, well-specified projects
- Discovery sprints
- Procurement that requires a fixed budget
Common pitfalls
- Vague specifications
- Quiet corner-cutting when budget runs low
- Costly renegotiation when you learn something new
Keep reading
GuideFixed price vs T&M vs milestonesWhich contract model protects you? Fixed price, time & materials and milestones compared on risk, flexibility, incentives and hidden costs.GlossaryTime & materials (T&M)Time and materials is a contract model where you pay for the time actually spent by the team, typically at agreed rates, with flexible scope.GlossaryChange requestA change request is a documented proposal to change agreed scope, with its cost and schedule impact estimated before anyone approves it.
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