Selecting the Right Contract
Selection of contract type
- Is best done by a multi-functional team representing
- Project management
- Technology and production management
- Procurement, finance and legal
The best interests of both buyer and seller
- Should be served, i.e. balanced
Any selection other than firm lump sum
- Should be justified with a rationale for its merits
Even firm lump sum
- Could be wrong
- If the "unknowns" lead to excessive pricing
- To provide contingencies to cover unknown risks