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Procurement Question

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mandarapu
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Procurement Question

Postby mandarapu Thu Jul 17, 2014 6:07 pm

A seller is working on a cost reimbursable contract when the buyer decides he would like to expand the scope of services and change to a fixed price contract.All of the following are sellers options except :

A. completing the original work on a cost reimbursable basis and then negotiating a fixed price
B.Completing the original work and rejecting the additional work
C.Negotiating a fixed price contract the includes the work
D.Starting over a new contract

What is right answer and why ?.
sunku65
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Re: Procurement Question

Postby sunku65 Thu Jul 17, 2014 6:55 pm

answer B.

Reject additional work on fixed price contract because these fixed price contract is more risk to seller.
signor_rk
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Re: Procurement Question

Postby signor_rk Fri Jul 18, 2014 4:22 am

I think Option # C is the right answer. Other options seems to be Seller options.
Regards ,

Ranjit
sunku65
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Re: Procurement Question

Postby sunku65 Fri Jul 18, 2014 5:57 am

Simply reject it. But he can choose option D as start new project on FP.
Any how fixed price contract is riskier than other contract types to the Seller.
namita
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Re: Procurement Question

Postby namita Fri Jul 18, 2014 7:22 am

Question is asking which option is not possible for seller. So seller can

A. completing the original work on a cost reimbursable basis and then negotiating a fixed price
B.Completing the original work and rejecting the additional work
C.Negotiating a fixed price contract the includes the work

However, seller can't really start all over again. This will be something going way beyond, an extreme step and definitely he is not the only one who can decide on this. He has to get Buyer's consent. Contract which exist on paper is a binding and going beyond/over it is always difficult. So, i'll go by D as best option among given

D.Starting over a new contract
sunku65
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Re: Procurement Question

Postby sunku65 Fri Jul 18, 2014 8:45 am

i dint thought except.
mandarapu
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Re: Procurement Question

Postby mandarapu Fri Jul 18, 2014 11:13 am

thanks Namita and sunku.

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