A contractor bidding on a fixed-price project must develop

Answer:

A contractor who wants to bid on a fixed-price project must make accurate and complete cost estimates and include sufficient emergency costs. This is due to the increased risk associated with a fixed-price contract. If a buyer and seller have already settled on a price for a project, it is unlikely that the price will increase to account for any additional expenses incurred by the seller in completing the deal. However, many of the dangers that come with handling a project with a set budget can be mitigated. It’s possible to accomplish this at any point in the proposal, contracting, or implementation phases of the project. Managing a project with a set budget requires three times the amount of information, twice as much expertise, and a pinch of art.