Common Contracts
1 similar Forward Rate Agreement contracts
Forward rate agreement calculatorForward Rate Agreement • October 28th, 2020
An agreement for a forward-priced (FPRA) is a contract between a public entity and a contractor where certain rates are set for a specified period of time. These rates are projections of costs that are difficult to assess and are used for price contracts and contract changes. An FPRA is used to ensure a fair and equitable price earned by a contractor and to protect a government agency from being charged unfairly. The contractor estimates these rates based on reasonable standards. The contracting government body must approve them before signing the agreement. Typically, forward pricing is estimated using a percentage or ratio. The percentage or ratio is based on unforeseen price differences. When the bill is issued, the cost is multiplied by this percentage or ratio. The rate protects contractors by allowing an additional amount in addition to the estimated official prices. The rate represents costs that are projected for material and labor costs, such as the cost of the material and la
