The fixed price contract _____.
A) requires developing a clear scope of work based on good information, creating a list of highly qualified bidders, and developing a clear contract that reflects that scope of work
B) will create lower total project costs than other forms of contracts when there are changes on the fixed price contract
C) requires the availability of at least one or more suppliers that have the qualifications and performance history that assures the needs of the project can be met
D) are not very effective in managing project costs.
E) offers a predictable cost for commodities and goods and services where the scope of work is very uncertain and likely to change

Question

Quizplus · Accepted Answer

A fixed price contract requires a clear scope of work, qualified bidders, and a contract that reflects the scope of work. This helps to ensure that the project is completed as specified within the agreed upon budget. Option B is incorrect because fixed price contracts do not typically provide flexibility for changes, and any changes would be subject to negotiation and potential additional costs. Option C is partially correct, but only focuses on the supplier qualification aspect of a fixed price contract, rather than the overall process. Option D is incorrect because fixed price contracts are effective in managing project costs when the scope of work is well-defined. Option E is not entirely accurate because fixed price contracts are typically used when the scope of work is well-defined, rather than uncertain.

The Fixed Price Contract _____