Contracting and Procurement in Project Management- Phase 2 part 2DB Essay

Contracting and Procurement in Project Management- Phase 2 part 2DB - Essay Example It simply relates to fixed-price contracts that proffer for development payments. Although it utilizes a formula procedure, it is not planned to be a precise result of the cost of working capital. Its intention is to present general detection to the contractor’s cost of working capital below unstable contract conditions, financing strategies and the financial situation. The contracting officer should analysis the extent to which expenses has been acquired previous to the finalization of the contract operation. The evaluation should be comprised some condensed contractor risk on together the contract previous to finalization and the enduring piece of the contract. When charges have been acquired previous to the finalization, usually scrutinize the contract category risk to be in the small termination of the designated selection. If an extensive part of the costs has been acquired previous to finalization, the contracting officer can distribute a worth as low as 0 %, in spite of contract type.1 Now I will discuses how contract types allocate risk in state of above normal conditions. The contracting officer might allocate an advanced than normal value when there is significant contract type risk. These risks can: FMS sales where the contractor would be able to divulge that there are considerable risks above those typically presented in DoD contracts for comparable items; or A violent performance based imbursement agenda that adds to risk. Now I will elaborate how contract types allocate risk in state of below normal conditions. The contracting officer may allocate an inferior than usual value when the contract category risk is small. Indicators of this are: Why this contract? I have selected this type of contract because the software development company will be given enough time to develop the software. Because there is no incentive for them in developing this software early and the price of software development is fixed, so they can not