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FIXED PRICE VS FIXED PRICE INCENTIVE FEE

Posted: Wed Oct 20, 2021 10:27 am
by praveen84
Saket, pls Clarify the following: - Question No.. 43, Mocktest 1

Several team members have been transferred to another project, so the project manager needs additional resource support from a new supplier. The project manager is concerned about the cost risk of using a new supplier at this stage of the project. Now, the project manager needs to work with the procurement team to establish specifications and type of contract to be used. What should be done?
• A. Recommend a time and material (TM) contract.
• B. Recommend a cost plus incentive fee (CPIF) contract.
• C. Recommend a fixed price incentive fee (FPIF) contract.
• D. Recommend a firm fixed price (FFP) contract.

I had recommended Firm Fixed Price, where as answer says FPIF

My thought: There is no urgency shown but only concern from the PM to cost risk for using new supplier. Hence to safeguard the interest of PM, we should go for FFP , why should I go for fixed price incentive?

Praveen

Re: FIXED PRICE VS FIXED PRICE INCENTIVE FEE

Posted: Thu Oct 21, 2021 6:56 am
by saket
I think this one is close and we may not have clear reason to select one over other. I feel the fix price is not good contract in this case since one is getting people rather than scope. I think we can ignore this question.