CISA Practice Question: Information Systems Acquisition, Development, and Implementation
Which of the following is a primary advantage of fixed-price contracts in systems acquisition?
⚠ Common exam trap
CISA often tests the confusion between cost predictability (the buyer's primary benefit) and cost minimization — candidates who pick 'lower total cost' fail to recognize that fixed-price contracts may actually cost more due to vendor risk premiums.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Predictable cost for the buyer
The defining characteristic of a fixed-price contract is that the buyer pays a set amount regardless of the vendor's actual costs, giving the buyer cost predictability and transferring cost-overrun risk to the vendor. This predictability is the primary advantage for the acquiring organization's budgeting and financial planning.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Vendor has incentive to complete quickly
Why it's wrong here
Fixed-price contracts shift cost risk to the vendor, so overruns erode their margin; speed is not the mechanism. The incentive is cost control, not schedule compression. Time-and-materials suits urgency, where the buyer accepts cost uncertainty to accelerate delivery.
- ✗
Greater flexibility to change requirements
Why it's wrong here
Fixed-price contracts restrict requirement changes because scope is contractually fixed, so flexibility is a disadvantage, not an advantage. It is tempting because buyers want adaptability, but that flexibility belongs to time-and-materials arrangements, where effort is billed as incurred.
- ✗
Lower total cost compared to time-and-materials
Why it's wrong here
Fixed-price contracts shift cost risk to the vendor, but they do not guarantee a lower total cost than time-and-materials; the vendor prices in that risk. It is tempting because price certainty feels cheaper, yet the advantage sought is predictable cost, not reduced cost.
- ✓
Predictable cost for the buyer
Why this is correct
A fixed-price contract sets the total cost before work begins, so the buyer bears no risk of cost overruns, giving predictable budgeting. The seller absorbs overrun risk instead, which is why vendors often price such contracts higher.
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Written and reviewed by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
Last reviewed September 2026 · checked against the official ISACA exam blueprint
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