An enterprise is working on a large commercial fencing project which builds a custom-built fence around a 10,000-square-foot property. A subcontractor, whose task is to produce the custom maple wood post end caps, will need to be hired so that the company can finish this project on time. So far, the procurement statement of work and the delivery date for the end caps have been clearly outlined. Based on the provided information, what type of contract will this enterprise likely use for the work carried out by the subcontractor?

Fixed-price contracts, also known as firm-price or lump-sum contracts, are agreements in which the two parties state the goods or services one party will provide and establish the price the other party will pay for them. Fixed-price contracts tend to be best suited for when a project’s scope can be clearly determined upfront, and the costs of the materials and labor needed to meet the contract's terms can be estimated with reasonable certainty. The amount paid to the seller won't increase, even if more materials or time are required than initially estimated. So that, with this type of contract the sellers have the greatest risk.