Project Procurement

 

As a project management professional, it is important for you to be able to review numbers and report on what they are saying. It is also important for you to be able to use software that helps you keep timelines and keep the project running on time and smoothly. This assignment will continue to help prepare you for your responsibilities.

Respond to the Following Questions/Problems

A certain project is being negotiated between a buyer and a seller. The project is a research project that has unknown deliverables. The buyer and seller are discussing the type of contract that should be agreed (fixed price or cost reimbursable). The buyer wants the seller to engage in a fixed price contract. What should the seller do? Why?

A certain project operating under a CPIF contract has been negotiated and formally agreed-upon between a buyer and a seller. The following information has been included in the contract:

Target Price: $223,096
Target Cost: $215,000
Target Fee: $8,000
Buyer’s Share Ratio: 0.70
Seller’s Share Ratio: 0.30
The project has finished and the actual cost that the seller incurred was $207,643.

What incentive fee does the buyer pay the seller?
What is the total contract price (i.e., what the buyer has to pay the seller in total)?
A certain project operating under a FPIF contract has been negotiated and formally agreed-upon between a buyer and a seller. The following information has been included in the contract:

Price Ceiling: $531,000
Target Cost: $505,000
Target Fee: $20,000
Buyer’s Share Ratio: 0.90
Seller’s Share Ratio: 0.10
The project has finished and the actual cost the seller incurred was $510,954.

What incentive fee does the buyer pay the seller?
What is the total contract price (i.e., what the buyer has to pay the seller in total)?
What is the point of total assumption for the seller?

 

 

 

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