What is a Fixed Price with Economic Price Adjustment Contract (FPEPA)?

In project management, Fixed Price with Economic Price Adjustment (FPEPA) is akin to having a defined price for a service or product but with a provision for modifications depending on specific economic considerations, similar to a subscription whose cost may fluctuate due to inflation or market conditions. It’s a contract in which the original price is agreed upon, but the price can be changed later based on factors such as inflation rates, currency fluctuations, or changes in material prices. It’s analogous to committing to buy something at a certain price, but if the cost of production rises due to economic changes, the contract allows for revisions, assuring fairness for both the buyer and seller under changing economic conditions.