According to the PMBOK® Guide and the PMI Procurement Management standards, a Firm Fixed Price (FFP) contract is considered the least desirable for a vendor (seller) because it places the maximum risk on the seller.

In an FFP arrangement:

Financial Risk: The price for goods or services is set at the outset and is not subject to change unless the scope of work changes. If the vendor ' s costs increase due to inefficiency, inflation (unless an EPA clause is present), or market fluctuations, the vendor must absorb those costs, which directly reduces their profit.

Legal Obligation: The seller is legally obligated to complete the effort. If they fail to do so, they may be subject to damages.

Comparison with other options provided in the documents:

Fixed Price with Economic Price Adjustment (FPEPA): This is more desirable than FFP for a vendor during long-term projects because it contains a special provision allowing for predefined final adjustments to the contract price due to changed conditions, such as inflation or cost increases for specific commodities.

Cost Reimbursable Contracts (CPFF and CPAF): These are highly desirable for vendors because the buyer assumes the cost risk. The seller is reimbursed for all allowable costs, meaning the vendor is protected from losing money even if the project costs run over budget. In these cases, the " Buyer " carries the highest risk.

As per the Standard for Project Management, the selection of a contract type must align with the level of risk the performing organization is willing to assume. For a vendor, the goal is typically to move toward cost-reimbursable models when the scope is not well-defined to avoid the pitfalls of a Firm Fixed Price agreement.