Contract Pricing Essay

* If the contract were to require new fixed costs in addition to variable costs at 10 % the total Margin cost would be $ 79,524 which would be a substantial increase of $8,056 from question 1

(a) The contracting officer shall insert the clause at 52-242-14, Suspension of Work, in solicitations and contracts when a fixed-price

Firm Fixed Price Contracts (FFP), it is appropriate for most commercial transactions, example: Software package that can be bought for $1,500 regardless of the seller’s cost.

* Terms allowing parties to vary the contract price known as a price variation clause.

If a good cost-measurement system was set up, cost-plus contracts will demonstrate the advantages of cost-management better than fixed price contracts do. With a robust cost-measurement system, managers are able to know the real revenue drivers, to recognize the most valuable customers, and to offer more reasonable price bid. That is to say, cost-measurement system’s strength lies in differentiating clients’ value, projects’ value and operation processes’ value case by case. Under this circumstance, cost-plus contracts would surely dig more utilization and benefit more from such a system, because CitySoft would be able to charge different customers and projects for different prices, which is critical for increasing profitability.

Explain what are royalty rate contracts and fixed-fee contracts. What is the main difference between them?

A lot of the work will consist of analyzing, testing, and modifying. This is why a CPAF contract was used instead of a fixed-cost contract because it is difficult to predict actual costs. A company would put themselves in a bad situation to have a fixed-cost contract if the costs where more than the contracted amount (Murphy, 2009, pp. 24-7).

The $320,000, on the other hand, is a fixed cost associated with the proposed addition.

A fixed term contract employee is someone that will work for the organisation for a period of time, this could be for a certain project, maternity cover or at a peak period for the business. The organisation will provide an employee with a contract stating the purpose of the role with start and end dates

What are the advantages and disadvantages of cost-plus pricing relative to the TSCC pricing program?

Two basic types of competitively bid construction contracts are lump-sum and the unit-price contract. The lump-sum contract is when the contractor agrees to complete all work for a pre-determined price including profit and the contract. The unit-price contract is when the contractor quotes work on units separately instead of entire project. Price is based on units of work performed, and cost varies depending on the quantities of units. Building the piers to support a large suspension bridge will

All the costs by a company can be broken into two categories, fixed costs and variable costs. Costs that are independent of output are called fixed costs. Fixed costs remain constant throughout the relevant range and are usually considered sunk for the relevant range. Buildings and machinery are included inputs that cannot be adjusted in the short term. They are only fixed in relation to the quantity of production for a certain time period. The cost of all inputs is variable, in the long run.

According to an article in the New York Times, aging wisely is all about how you feel, your attitude, health and how productive you are. Therefore if we have a positive attitude as we age we will tend to take better care of ourselves, exercise and eat healthy. Graham mentions in the article that the stereotype that as we age we become useless the attitude can become that person. On the other hand if there is satisfaction and production the older adult is more likely to work hard to be healthy and may even recover more easily from illness (Graham, 2012)

Learning contracts are being used in post-secondary education. Adults approach learning as problem solving and in theory by implementing learning contracts, the student becomes more involved in

A Fixed Price contract provides for a price which normally is not subject to any adjustment unless certain provisions are included in the agreement, such as contract change, economic pricing, or defective pricing. These contracts are negotiated usually where reasonably definite specifications are available, and costs can be estimated with reasonable accuracy. A