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متابعة

Which of the following contracts has the MOST risk for the buyer?

A. Cost plus fixed fee (CPFF) B. Cost plus percentage of costs (CPPC) C. Time and Materials (T&M) D. Fixed price (FP)

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تم إضافة السؤال من قبل Muhammad Farooq , QA-QC MANAGER , AL Bawani contracting co.
تاريخ النشر: 2018/07/18
Zaheer Abbas
من قبل Zaheer Abbas , Master Trainer , Al-Nisa Educational Institute

Contract type most favorable or most risky, is a matter of selection according to the nature of job. The projected & tentative economic conditions of the allied cost shall give a precise idea of the situation to select. However, in general CPPC is the most risky option for the buyer with a simple reason of "Percentage on Base", i.e. higher the base, highest the percentage. 

Muhammad Farooq
من قبل Muhammad Farooq , QA-QC MANAGER , AL Bawani contracting co.

Answer: BExplanation: Cost-plus contracts are ones where the seller bills the buyer for any costs incurred on the project. A "Cost plus percentage of costs" (CPPC) contract is one where the seller agrees to pay a percentage of the total costs of the project. This is the riskiest kind of contract for the buyer,because if the costs get really high then they're passed along to the buyer - and the seller doesn't have any incentive to keep them down!

 

Jyothsna Vidavaluru
من قبل Jyothsna Vidavaluru , Project Manager, Scrum Master, Agile Coach , Larsen & Toubro Infotech Limited

CPPC has more risk to buyer.

Mohammad Ababneh
من قبل Mohammad Ababneh , Sr Quantity Surveyor , Keo International Consultants - Saudi Arabia

B-Cost plus percentage of cost CPPC.

 

In this type of contract nothing will motivate the contractor to keep the cost low. 

Ruslan Nurmanov
من قبل Ruslan Nurmanov , Various Business development / Continuous improvement projects , Various projects

A. Cost plus fixed fee (CPFF) 

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