Which of the following is a type of negotiated contract?

• A. Time & Materials
• B. Fixed Price & Cost Reimbursement
• C. Sealed Bid
• D. Open Market

Answer: (B)

Negotiated contracts involve agreeing on price and terms through discussion with the contractor rather than awarding purely by submitted bids. The two main contract types that are established through this negotiation are fixed-price contracts and cost-reimbursement contracts. A fixed-price contract sets a specific price for the defined work, with the terms and risk allocations worked out in advance between the parties. A cost-reimbursement contract reimburses the contractor for allowable costs up to a set ceiling, plus an agreed-upon fee, which requires ongoing negotiation and oversight as costs accrue. Sealed bidding, in contrast, is awarded to the lowest responsive bidder based on price after bids are opened, with limited post-award negotiation. Open market purchases are informal and not structured as formal negotiated contracts. Time and Materials is a recognized contract type, but the typical framing here emphasizes the fixed-price and cost-reimbursement categories as the negotiated contract options.