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What are the advantages / disadvantages of fixed price contracts?

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Question added by Muhammad Rizwan , Executive Procurement (Technical) , FFCL
Date Posted: 2015/11/08
Danilo Dino
by Danilo Dino , Supply Officer II , Contract Management Division - DOH

Advantage of fixed price is that it doesnt affect the awarded price even if there is a price escalation of goods and services being the provider.

Disadvantage is with the Service Provider, cause if the price of their service/goods being provided went up, they tend to ask for cancellation of the Contract.

Yulia Ye
by Yulia Ye , SEO , Cleveroad

Fixed Price contract pros and cons :

 

 

 

 

Time and material contract pros and cons:

 

 

Tariq Al Farah
by Tariq Al Farah , Commercial Manager , Zeus International Management Consulting & Trade LLC

The Risk of the fixed price and International economy prices.

If you buy for example gas ( LPG) at fixed priceUSD/MT for one year contract and then the platt's price going down to USD/MT that will cause a huge lose and bankruptcy for the company

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