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Agile-friendly contracting focuses on incremental commitment, transparency, and shared risk while preserving adaptability. A T&M with not-to-exceed (NTE) per sprint or iteration limits financial exposure for the buyer, allows reprioritization of backlog items each timebox, and enables continuation based on demonstrated value. Clear acceptance criteria, Definition of Done, and cadence-based reviews (e.g., Sprint Review) provide governance. Firm Fixed Price for total scope (Option A) pushes for rigid requirements and change-heavy administration, undermining agility. FP-EPA (Option C) addresses macroeconomic price shifts for long-term fixed-scope deals, not evolving scope. CPFF (Option D) shifts cost risk to the buyer and can reduce incentive alignment; it may be suitable for R&D but is less aligned with predictable, iterative delivery. CAPM procurement guidance encourages aligning contract structure with delivery approach: define outcome-based measures, establish collaboration protocols, and include termination or renewal options per increment. This balances flexibility with control, improving time-to-value and reducing the risks inherent in large, fixed-scope commitments.