Incentive Contracts (both Cost & Fixed Price Types) provide a method for adjusting the contractor's profit or fee, and establishing the final contract price by using a formula based on the relationship of final negotiated total cost to total target cost. A. True B. False

Question

Carlie Schmitt

Business

31 March, 15:44

Incentive Contracts (both Cost & Fixed Price Types) provide a method for adjusting the contractor's profit or fee, and establishing the final contract price by using a formula based on the relationship of final negotiated total cost to total target cost. A. True B. False

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Brando · Answer 1

True

Explanation:

The statement is correct that Incentive Contracts (both Cost & Fixed Price Types) provide a method for adjusting the contractor's profit or fee, and establishing the final contract price by using a formula based on the relationship of final negotiated total cost to total target cost because in project management a contract is said to be incentive based when the owner has promised to make additional compensation to the contract price if in the course of the contractor's execution, events trigger a higher compensation; which could be as a result of cost, delay in time schedule, increased quality, and higher safety standards than those originally prescribed in the contract terms and conditions.