Cost Reimbursement Contracts Case Study

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01- Fixed price contracts (Lump sum):

In this method , the payment is not depend on time expanded or resources used. the contractor will be paid a fixed price. It is usually a competitive tendering process.
Fixed price contract is opposed to a cost-plus contract, which is projected to cover the prices with extra profit made.
The contractor will not receive an extra payment for accomplishing higher quality standards. The contractor shall bear all the costs of providing the service or item mentioned in the contract
This means that only the contractor who is affected by the losses, which also will get the profits, if there is any profit in the project.
The client must be satisfied by the contractor on site in all cases. in this project , the
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There are some special forms of cost reimbursement contract like:
- (CPC) capped price contract. It is similar to cost reimbursement contracts in that a daily fee, that includes also a profit component, is agreed for a certain number of capped days.
- (UTC) unit price contracts: the buyer will ask the suplieres to submit offers specifying a separate unit price for each input factor. in addition, the buyer announces an estimate of the quantity of the input factors needed to complete the project.

03- Incentive contracts:
This method has two types as its are used when the project is complex and used in the US for defense

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