What is 'Fixed Price with Economic Price Adjustment' in SAP PSM-GPR - Procurement for Public Sector?

Fixed Price with Economic Price Adjustment - Overview

• Component: PSM-GPR

• Component Name: Procurement for Public Sector

• Description: A pricing arrangement where an organization agrees to pay a price for requested goods or services that is adjustable according to specific economic factors, such as: Changes in the supplier’s commercial pricing for an item Changes in actual labor or material costs during contract execution Changes in economic indicators, such as the price of a barrel of oil

Fixed Price with Economic Price Adjustment - Details

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  Key Concepts: 
  Fixed Price with Economic Price Adjustment (FPEPA) is a type of contract used in the Public Sector Module (PSM-GPR) of SAP software. It is a fixed-price contract that allows for price adjustments based on economic conditions. The contract is designed to protect both the buyer and seller from unexpected changes in the market. 
  
  How to use it: 
  In order to use FPEPA, the buyer and seller must agree on a fixed price for the goods or services being purchased. The buyer must also agree to a set of conditions that will allow for price adjustments based on economic conditions. These conditions can include changes in the cost of raw materials, labor costs, or other factors that could affect the price of the goods or services. Once these conditions are agreed upon, the contract is finalized and can be used for future purchases. 
  
  Tips & Tricks: 
  When using FPEPA, it is important to ensure that all parties involved understand the terms of the contract and agree to them. It is also important to keep track of any changes in economic conditions that could affect the price of the goods or services being purchased. This will help ensure that both parties are protected from unexpected changes in the market. 
  
  Related Information: 
  For more information about FPEPA and other types of contracts used in PSM-GPR Procurement