PMP Practice: Participate in agreement negotiations

Sky Petersen is managing a product development project for Pickle Rocket Labs, a medical device company creating a new patient monitoring system. The project has two major components: hardware manufacturing (highly regulated, fixed scope, 18-month timeline) and software interface development (evolving user requirements, 12-month timeline). Sky is negotiating a contract with Cosmic Solutions, a vendor who will deliver both components. The vendor's proposal suggests using a fixed-price contract for the entire project to simplify procurement. However, during negotiation discussions, the vendor's technical lead mentions they've never built medical device software before and expects significant learning as they understand clinician workflows. The hardware specifications are fully defined and pre-approved by regulatory authorities. What approach should Sky negotiate to best meet the project's objectives?