Asked by Eliani Acosta on May 05, 2024
Verified
_____ is a contract based on an agreed-on unit price for services or materials if the amount needed is not known accurately.
A) Cost reimbursable contract with a percentage fee
B) Cost reimbursable contract with a fixed fee
C) Fixed price with incentive fee contract
D) Fixed unit price contract
E) Fixed unit cost contract
Fixed Unit Price Contract
A contract type where the price for each unit of work is agreed upon before the work begins, regardless of the total cost.
Services
Activities performed by one party for another that do not result in ownership of physical products, often characterized by intangibility, variability, and inseparability.
Materials
The tangible substances or components used in the construction or manufacture of a product within a project.
- Develop an understanding of the multiple types of contracts in use for projects and their implications on the management of projects.
Verified Answer
ZK
Zybrea KnightMay 06, 2024
Final Answer :
D
Explanation :
A fixed unit price contract is appropriate when the amount of services or materials needed is not known accurately. This type of contract establishes a fixed price per unit of service or material delivered, such as per hour of service or per ton of material. The total price for the project is then calculated based on the actual amount of services or materials delivered, multiplied by the unit price. This type of contract provides a clear and predictable cost structure for both the client and the contractor.
Learning Objectives
- Develop an understanding of the multiple types of contracts in use for projects and their implications on the management of projects.