Great question! FAR 16.207 is very brief in describing this contract type and the DFARS is silent. FAR 16.207 says the government will pay "a fixed dollar amount". It does not say how to do that, so that is the choice of the contracting officer. As long as the determination of fair and reasonable pricing can articulate how the fixed dollar amount is reached, there should be flexibility in terms of not locking down the contract labor categories. The contractor will be paid not for their performance, but the negotiated fixed priced for their level of effort. As a reminder, this contract type is capped at the SAT unless the COCO approved a higher amount.
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