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Why is it wrong to use fixed price contracts if we don't have a clear scope definition?

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Question added by Deleted user
Date Posted: 2014/04/14
JAIME ESTRADA
by JAIME ESTRADA , Contracts Engineer (Contracts Management) , SRACO-SATORP

In a service contract, there is the probability that the service provider will only provide the basic service mentioned in the contract and will ignore other relevant tasks associated with the work.

amer jayyousi
by amer jayyousi , Business Development Consultant , freelance

Because of the variable and unexpected fluctuations including but not limited to currency,additional charges,variable costs...etc.

pravinchandra Dhameliya
by pravinchandra Dhameliya , Project Engineer Civil. , Metafrique SARL

If you dont know what exactly you wants how you can negotiate and come to actual price? we have to be very clear in our mind and should communicate it in very clearly before asking quote..

Anas Ksaiby
by Anas Ksaiby , Sr. Project Execution Engineer , Alfanar

Fixed price contracts place risk on the seller, one of the project's stakeholders . If there is any type of price increase, seller would be responsible for the increased costs and cannot pass them on to the buyer.

 

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