Tag Archives: firm-fixed-price

Wartime Construction Project Outcomes as a Function of Contract Type

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Authors: Capt Ryan Hoff, USAF, Maj Gregory Hammond, USAF, Lt Col Peter Feng, USAF, and Edward White

The United States has spent more than $23 billion on construction in Afghanistan since 2001. The dynamic security situation created substantial project uncertainty, and many construction projects used cost-plus-fixed-fee contracts (CPFF) instead of the firm-fixed-price (FFP) norm. Using a dataset of 25 wartime construction projects managed by the Air Force Civil Engineer Center, the authors sought to confirm that both contract types yield project outcomes consistent with the established literature. As expected, they found CPFF contracts had greater cost and schedule growth than FFP. However, they did not find differences regarding as-built quality. Additionally, the authors sought to determine whether CPFF contracts exhibited greater construction risks than FFP contracts. They found no significant differences between contract types in terms of security incidents or other environmental factors. This research may be particularly relevant to military owners who contract projects in wartime environments.

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