Certified Public Procurement Officer (CPPO) Practice Test 2025 - Free CPPO Practice Questions and Study Guide

The type of contract that allows for a fixed price, which can be adjusted based on certain contingencies, is the one that includes economic adjustments. This type of contract is designed to accommodate changes in costs that could arise due to economic conditions, such as inflation or changes in labor rates. Thus, if certain criteria set out in the contract are met, the original fixed price may be modified to reflect these changes, ensuring that the contractor is not unduly burdened by rising costs over time, while still providing a level of cost certainty to the buyer.

The presence of economic adjustments in this contract type makes it particularly beneficial in long-term projects where price stability is essential, but there is also a need for flexibility in pricing due to external economic factors. This ensures both parties remain fairly treated in changing economic environments.

In contrast, other options may not provide the same level of price adjustment flexibility linked to economic changes. For example, a cost-plus type of contract might not fix the price initially since it reimburses the contractor for costs incurred plus an additional percentage, but it does not typically provide a fixed price that adjusts for contingencies like economic fluctuations. Therefore, the fixed price with economic adjustment stands out as the appropriate choice for this question.