PMP Exam Set F – Q58

A seller started out a project on the basis of a Time and Material contract. The initial contract amount based on the agreed-upon rates and effort was $ 100,000 over a 1 year period. However, when the project was completed, the total contract value turned out to be $ 350,000 over a 2 year period. What mechanism could the buyer have used to prevent this unlimited cost growth and schedule change?

A. Use of a not-to-exceed value and a time limit on the contract.
B. A service level agreement.
C. A penalty based on the increased cost and timeline.
D. Use of a fixed price contract.

A. Use of a not-to-exceed value and a time limit on the contract.