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contract question from Scordo

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coolpmp69
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contract question from Scordo

Postby coolpmp69 Sun Mar 01, 2015 1:38 am

Source : Scordo

If you are working on a project with constantly changing scope, which contract type would work best when hiring an outside vendor to complete a portion of the work?
a. Cost reimbursable
b. Lump sum
c.Time and material
d. Fixed price

I picked option A as my answer but the correct answer is C. In my understanding when the scope cannot be defined precisely then you choose cost reimbursable contract and T&M is used where there is no precise SOW at the beginning of the work. Am I missing anything here?
pank_pmp
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Re: contract question from Scordo

Postby pank_pmp Sun Mar 01, 2015 12:31 pm

Time and Material is correct, since it is less riskier in buyers point of view when scope is not defined. Buyers pays accordingly to resource rates and material used.
coolpmp69
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Re: contract question from Scordo

Postby coolpmp69 Sun Mar 01, 2015 8:33 pm

thanks pank_pmp. Can you give some examples as to when to use cost reimbursable contract types?
dipti5ece
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Re: contract question from Scordo

Postby dipti5ece Mon Mar 02, 2015 10:50 am

I guess there is a chart showing the risk vs contract ......in PMBOK.
coolpmp69
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Re: contract question from Scordo

Postby coolpmp69 Mon Mar 02, 2015 2:15 pm

@dipti5ece : can you provide the page number/topic name in pmbok?
pank_pmp
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Re: contract question from Scordo

Postby pank_pmp Tue Mar 03, 2015 2:58 am

Apart from graph (which you can use to memorize), please reread contract types again from Rita. It explains things very clearly! It is hard to explain until and unless you have understanding of them (contracts)!
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Re: contract question from Scordo

Postby signor_rk Tue Mar 03, 2015 12:49 pm

That Graph is available in Rita's Book. We can not find it in the PMBOK Guide Fifth Edition.
Regards ,

Ranjit
coolpmp69
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Re: contract question from Scordo

Postby coolpmp69 Tue Mar 03, 2015 1:49 pm

Are you referring to figure 12.1 - Risk to Buyer and Seller According to Contract Types from Rita?
dipti5ece
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Re: contract question from Scordo

Postby dipti5ece Tue Mar 03, 2015 2:29 pm

Ahh...yes it was Rita

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