What type of contract is designed to allow for economic price adjustments?

The type of contract specifically designed to allow for economic price adjustments is the Fixed-Price with Economic Price Adjustment contract. This contract structure is beneficial in situations where market fluctuations in costs, such as inflation or changes in labor rates, may impact the overall pricing of the project.

The Fixed-Price with Economic Price Adjustment contract provides a fixed price for the goods or services to be provided but includes clauses that permit adjustments to the price based on predefined economic indicators. This allows both parties to share the risks associated with these economic fluctuations. It is particularly useful in long-term projects where price volatility is more likely to occur over the contract duration.

In contrast, the other contract types mentioned do not incorporate specific provisions for economic price adjustments. Cost-Plus-Fixed-Fee contracts focus on reimbursing the contractor for costs plus a fixed fee, Firm-Fixed-Price contracts set a specific price that does not change regardless of cost fluctuations, and Cost-Plus-A-Percentage-of-a-Cost contracts base the contractor's payment on a percentage of the incurred costs, which does not inherently address economic adjustments for price variability.