Which of the following contracts should you use for projects that have a degree of uncertainty and require a large investment early in the project?

A. Cost reimbursable.................

My opinion is that the right answer is: A

Thanks for invite

Option - A 

I believe that question has not been framed correctly because Cost Reimbursable contract is a type of T&M contract (i.e. it is subset of Time & Material Contract). Hence, they should not be listed as the separate options in the questions.

It is A - Cost Reimbursable whenever there is any degree of uncertainity in the project scope.

cost reimbursable will be used if there is uncertainity about the scope

A. Cost reimbursable, are to be apllicated due degree uncertain on contracts comply

there is no list of contracts to choose from - thanks

The safest, and most reliable contract type for this situation would likely be option A. Cost Reimbursable. Although my understanding would be that T&M type contracts would serve the same purpose, depending on the contract particulars.

The only real drawbacks from these options are that, to a certain extent, your profit margin is restricted, as your mark-up would be hedged to the actual costs incurred.

From a Client perspective, there is the inherent risk that the Contractor's productivity will not be guaranteed. The reason being, that the Contractor's net profit will increase the more manhours he burns on the job, so there is no motivation for the Contractor to work efficiently.  A potential way to mitigate this would be to have an agreed manpower loaded Project schedule as part of the Contract.  The Problem with this is obviously that there is a degree of uncertainty in the Project Scope, so this would very quickly be difficult to hold the Contractor to.  You would again find yourself at the mercy of the Contractors desired productivity.  Agreeing on a set of norms prior to Contract award would also help to mitigate this risk.

Obviously where there is this risk for the Client, the same issue becomes an opportunity from a Contractors perspective.

Thanks for your invitation. I did not see any one of the following contracts listed.

A. Cost reimbursable is my option,,.. Thanks