Introduction to project management/IPM103/Procurement/Contract types

Reading

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Read the the section Contract Types in the prescribed textbook (Web | PDF), Chapter 13 (page 120 to the top of 123 in the pdf version).

This section describes the various types of contract for a project.

• Fixed-Price Contracts - a legal agreement between the project organisation and the contractor to provide goods or services at an agreed-on price (regardless of effort applied or delivery date)
• Cost-Reimbursable Contracts - a legal agreement where the project organisation agrees to pay the contractor for the cost of performing the service or providing the goods
• Time and Materials Contracts - a legal agreement where the contractor might charge an hourly rate for labour, plus the cost of materials, plus a percentage of the total costs.
  

WEnote post

Select a contract type outlined in the chapter and share at least one strength and one weakness of that type of contract. If you can, provide an example to support what you are saying. Post your comment below and then look on the course feed page to see what others have posted. For example:

• "A key strength of Fixed-Price Contracts is ...for examples a contract for...."
• "A weakness of Cost-Reimbursable Contracts is ... for example a contract for...."

Note: Your comment will be displayed in the course feed.