lesson 1 answer - profit or loss It imposes a minimum...

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MGMT 5211 LESSON 1 2. Using the above lawn maintenance contract, compare and contract fixed-price contracts and cost-type contracts. Fixed-price Contract: Fixed-price types of contracts used for a firm price, or an adjustable price. Fixed-price contracts include a ceiling price, a target price. In fixed-priced contract a price is not subject to any adjustment on the basis of the contractor's cost experience in performing the contract. This contract keeps maximum risk to the contractor and full responsibility for all costs and resulting
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Unformatted text preview: profit or loss. It imposes a minimum administrative burden upon contracting parties Cost-type contracts : The "cost type contract" referred as a ballpark figure of the expected amount of money. This type of contract takes the risk out of the deal for the contractor. This contract guaranteed to the contractor on the bases of a percentage of the money or a fixed amount of money as his profit. In this type of contract Contractor's costs responsibility is minimized and Government's cost responsibility is maximized....
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  • Spring '11
  • hughes
  • Transaction cost, Fixed-price contracts, contract Contractor, cost-type contracts, lawn maintenance contract

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