Start networking and exchanging professional insights

Register now or log in to join your professional community.

Follow

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?

 

life cycle?

A. Cost reimbursable

B. T&M

C. Fixed price

D. Lump sum

 

user-image
Question added by Muhammad Farooq , QA-QC MANAGER , AL Bawani contracting co.
Date Posted: 2017/05/05
Nadeem Asghar
by Nadeem Asghar , Supply Chain Consultant/Trainer , Independent Practitioner

I would go for option A Cost Reimbursable Contract

MICHAIL KOSTOUROS  PMP PMI-RMP
by MICHAIL KOSTOUROS PMP PMI-RMP , Project Manager , SEEC S.A.

Fixed price and lump sum is the same type of contract , with very complete statement of work,

T&M is used when we have uncertainty, but is for a short time period and is used when we want to deal with a matter, very quickly.

Cost reimbursable contract is the best choice when we have a degree of uncertainty, which means we can not define well and clearly the statement of work of the project.

A. is the best answer 

 

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

In my opinion - A. Cost reimbursable -   Explanation:  Cost-reimbursable contracts are used when the degree of uncertainty is high and when the project requires a large investment prior to completion of the project.

Zaferullah Sharief, PMP®
by Zaferullah Sharief, PMP® , Project Manager , Huawei Technologies

Option A is the best choice.

Mohammed Awad
by Mohammed Awad , Operations Coordinator - Jordan and Iraq (Consultancy) , Lutheran world federation

I would use fixed-price since I do not know what the requirements are and I will not go for lump sum because this might not be fair for any of the parties.

DR MD ANWAR HOSSAIN
by DR MD ANWAR HOSSAIN , Moderator , bayt.com

Thank you. I think option A. Cost reimbursable is a good answer.

More Questions Like This