Contracts Their Influence On Projects

The final decision on whether to trade-off cost, time, or performance can vary depending on the type of contract. Table 16-4 identifies seven common types of contracts and the order in which trade-offs will be made.

The firm-fixed-price (FFP) contract. Time, cost, and performance are all specified within the contract, and are the contractor's responsibility. Because all constraints are equally important with respect to this type of contract, the sequence of resources sacrificed is the same as for the project-driven organization shown previously in Table 16-1.

The fixed-price-incentive-fee (FPIF) contract. Cost is measured to determine the incentive fee, and thus is the last constraint to be considered for trade-off. Because performance is usually more important than schedule for project completion, time is considered the first constraint for trade-off, and performance is the second.

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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