Here are my 2 cents on this issue and based on my dealing with Gov. Contracts:

Fixed Price as defined by the US Gov. here applies to the project only. There are other types of contracts based on time and labor called time and labor in addition to cost reimburesment contract and cost+incentive. Explaining every type could be time consuming but in short the least profitable and the riskiest is Fixed price to the contractor and therefore it's in the best interest of the Gov. tht is why you have a preference here in the Gov. to award FP Contracts. As a contractor, it could be risky becuase of ill defined requirements by users that would typically trigger redesign, recoding and regression testing.