CSIT214 Lecture Notes - Lecture 11: Fixed Price
18 Dec 2019
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Document Summary
Contract types and the risks they expose for the buyer. 3 overarching types of contracts: fixed price / lump sum fixed total price for some well-defined product or service. This type of contract bears little risk to buyer as price is predefined, but is rather risky for the seller who may incur unknown costs after the time of quoting the price. This is more risky for the buyer that the fixed price as the cost of supplies is not fixed and may overrun expectations: time and material hybrid of fixed price and cost-reimbursable. Includes some cost fee for materials and then a variable fee for the time of the contractor (some hourly fee where we don"t know how many hours will actually be completed). Often used for services when the work cannot be specified clearly.
