A buyer and seller are looking at getting into a long-term relationship spanning over 10 years. Both parties would like to be protected from the unstable financial conditions of the country that are beyond their control. What type of contract is appropriate for such a relationship?
A. Fixed Price Incentive Fee (FPIF) B. Firm Fixed Price (FPP) C. Time & Material (T&M) D. Fixed Price with Economic Price Adjustment Contract (FP-EPA)
D. Fixed Price with Economic Price Adjustment Contract (FP-EPA)
As an external vendor, you are managing a complex software project that has been contracted on Time & Material (T&M). One of your team-members reports a break-through in automating some of the testing activities. This will potentially result in cost savings to the project as well as the project getting completed ahead of schedule by a month. Which of the following actions would you take?
A. This is confidential information within your project team and need not be shared with the customer. The savings will be additional profits on the project. B. Communicate the current status and inform the customer that you will be incorporating some additional features to use up the savings in cost and time since it has been budgeted for. C. Communicate the current status to the customer and indicate the potential changes to cost and schedule. D. Communicate the savings in cost and time to the customer. At the end of the project, notify your billing department that they need to prepare an invoice for 50% of the cost being saved.
C. Communicate the current status to the customer and indicate the potential changes to cost and schedule.