A lot of contractors are working on fixed price contracts or fixed rate contracts. Sick leave will not be billable hours so the new cost will come out of the bottom line.
I am sorry but you are wrong. A fixed rate or firm fixed price contract is based on DCCA rules. The dollar amount is never truly fixed like in the Private sector.
The actual money always varies.
That said it must stand up to audit. I will tell you from experience these annual audits are no fun.