Question

What type of pricing agreements would you recommend for the following situations?

a)The provision of specialist consultancy services for a period of six months to support the purchase of a new IT system.

b)The manufacture of a new component for incorporation in a new product that will be launched in six months’time.

c)The building of a new school where the contract requires the contractor to supply all the furnishings and equipment

. d)The retention of a professional institute to provide three years training services where the content and quantity is currently unknown.

e)A one-year contract for the supply of external catering services, including the provision of food

Answer 1

a) The provision of specialist consultancy services for a period of six months to support the purchase of a new IT system - Cost plus fixed fees pricing agreement

b) The manufacture of a new component for incorporation in a new product that will be launched in six month's time - Cost reimbursement pricing agreement

c) The building of new school where the contract requires to supply all the furnishings and equipment - Pricing agreement based on time and materials cost

d) The retention of a professional institute to provide three years training services where the content and quantity is currently unknown - Cost plus fixed fees pricing agreement

e) A one - year contract for the supply of external catering services, including the provision of food - Fixed price agreement