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BUS402: Unit 6 Discussion Questions

Consider responding to the following questions by posting your response on the course discussion board for BUS402. You may also respond to other students’ posts.

  1. In general, what types of project contracts exist? What are differences among them? As a project manager, what would be your most favorite contract to manage? Why?
  2. How can you handle changes requested by your clients after the project deliverables have been officially accepted?
  3. Assume you are assigned to an international project, what kind of potential issues or challenges do you need to be aware of when you start to plan the project?
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1. In general, what types of project contracts exist? What are differences among them? As a project manager, what would be your most favorite contract to manage? Why?

1- Total fixed cost is a single price where the scope is well defined.
2- A fixed price with incentive contract offers a reward for finishing early or under budget or a penalty for being late.
3- A fixed price with adjustment allows for increases in cost of materials or changes in currency values.
4-A fixed unit price contract sets a price per unit, but the exact number of units is not known.
5- cost reimbursable plus fixed fee contract assures the contractor of a known fee.
6- A cost reimbursable plus percentage fee calculates the fee as a percentage of the costs.
7-A cost reimbursable plus incentive fee sets goals for the contractor to achieve that would result in a bonus.
8-A cost reimbursable plus award fee is similar, but the goals are more subjective.
9-Time and materials contracts pay for costs plus an hourly rate for the contractor’s time.

2. How can you handle changes requested by your clients after the project deliverables have been officially accepted?

new contract

3. Assume you are assigned to an international project, what kind of potential issues or challenges do you need to be aware of when you start to plan the project?

technical issu
behaviours issu
environnementale issu

3 Likes

As a project manager, my favorite contract to manage will be fixed total cost contract. The reason is I would love to have my total attention on completing the project on schedule, so I don’t want a situation where we will still be discussing changes in cost of materials which will divide my attention towards the completion of the project.

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As a project manager, my favorite contract to manage will be fixed total cost contract. The reason is I would love to have my total attention on completing the project on schedule, so I dont want a situation where we will still be discussing changes in cost of materials which will divide my attention towards the completion of the project.

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1.fixed price contract. It is used when goods or services are known or scope of work to be done is known
Cost reimbursable contract. It is used when scope of work or the cost for performing the work is not well known.

2 Likes

Two types of project contract are there one is fixed price contract and the other one is cost reimbursement contrast . And their difference is the first one is offers for predictable cost and second one is when the cost of performing the work not known. and my favorite contract is cost reimbursement contract because in my ten years experience I am familiar for this kind of contract as most outsourced contracts the volume of work is not known.
2. for unsatisfied client I prepare a revisited project decision mechanism and try to explain for him
3.I take minimum requirement for a project plan
3.1 what is to be done
3.2 when it needs to be done
3.3 who is to do it
3.4 How it is to be achieved

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  1. In general, what types of project contracts exist? What are differences among them? As a project manager, what would be your most favorite contract to manage? Why?
  2. How can you handle changes requested by your clients after the project deliverables have been officially accepted?
  3. Assume you are assigned to an international project, what kind of potential issues or challenges do you need to be aware of when you start to plan the project?
2 Likes

1. In general, what types of project contracts exist? What are differences among them? As a project manager, what would be your most favorite contract to manage? Why?

1- Total fixed cost is a single price where the scope is well defined.
2- A fixed price with incentive contract offers a reward for finishing early or under budget or a penalty for being late.
3- A fixed price with adjustment allows for increases in cost of materials or changes in currency values.
4-A fixed unit price contract sets a price per unit, but the exact number of units is not known.
5- cost reimbursable plus fixed fee contract assures the contractor of a known fee.
6- A cost reimbursable plus percentage fee calculates the fee as a percentage of the costs.
7-A cost reimbursable plus incentive fee sets goals for the contractor to achieve that would result in a bonus.
8-A cost reimbursable plus award fee is similar, but the goals are more subjective.
9-Time and materials contracts pay for costs plus an hourly rate for the contractor’s time.

2. How can you handle changes requested by your clients after the project deliverables have been officially accepted?

new contract

3. Assume you are assigned to an international project, what kind of potential issues or challenges do you need to be aware of when you start to plan the project?

technical issu
behaviours issu
environnementale issu

2 Likes

1. In general, what types of project contracts exist? What are differences among them? As a project manager, what would be your most favorite contract to manage? Why?

1- Total fixed cost is a single price where the scope is well defined.
2- A fixed price with incentive contract offers a reward for finishing early or under budget or a penalty for being late.
3- A fixed price with adjustment allows for increases in cost of materials or changes in currency values.
4-A fixed unit price contract sets a price per unit, but the exact number of units is not known.
5- cost reimbursable plus fixed fee contract assures the contractor of a known fee.
6- A cost reimbursable plus percentage fee calculates the fee as a percentage of the costs.
7-A cost reimbursable plus incentive fee sets goals for the contractor to achieve that would result in a bonus.
8-A cost reimbursable plus award fee is similar, but the goals are more subjective.
9-Time and materials contracts pay for costs plus an hourly rate for the contractor’s time.

2. How can you handle changes requested by your clients after the project deliverables have been officially accepted?

new contract

3. Assume you are assigned to an international project, what kind of potential issues or challenges do you need to be aware of when you start to plan the project?

technical issu
behaviours issu
environnementale issu

3 Likes

(1)_1-The fixed price contract: the fixed price contract offers a predictable cost. The responsibility for managing the work to meet the needs of the project is concentrated on the contractor.

2-Fixed total cost contract: the service provider is required to include all costs, including profits, in the agreed price, assumes the risks of unexpected increase in labor and materials required to provide the service or materials and the amount of time and materials required.

3-Fixed price with price adjustment: for unusually long projects spanning years. Would allow the contract price to be adjusted according to a variation.

4-Fixed price with incentive compensation contract: type of contract that provides an incentive to execute the project above the baseline established in the contract

:

5-Fixed unit price: The project team assumes responsibility for estimating the number of units used.

6-Refundable contracts: the organization agrees to pay the contractor the cost of providing the service or supplying the goods.

7-Contract with reimbursable costs with fixed costs: provides the contractor with fees or an amount of profit which is determined at the start of the contract and does not change.

8-Refundable contract with percentage fees: pays the contractor for costs plus a percentage of costs, such as 5 percent of total eligible costs

9: Refundable contract with incentive fees: to encourage performance in critical areas of the project.

10-Cost plus contract with award fees: A cost price contract plus award fees reimburses the contractor all eligible costs plus fees based on performance criteria.

11-Time and materials contracts: For small activities with high uncertainty, the contractor may charge an hourly rate for labor, plus the cost of materials, plus a percentage of the total cost.
As a project manager,my most favorite contract is Fixed total cost contrac

(2)_On less complex projects, an informal discussion at project meetings can raise awareness that a decision needs to be reconsidered. On more complex projects, the action register and weekly project meetings provide a place to reconsider decisions.

(3)_The volume of resources and the delay and risks of all kinds

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Q1. In general, what types of project contracts exist? What are differences among them? As a project manager, what would be your most favorite contract to manage? Why?
A1:

  1. Total fixed cost is a single price where the scope is well defined.
  2. A fixed price with incentive contract offers a reward for finishing early or under budget or a penalty for being late.
  3. A fixed price with adjustment allows for increases in cost of materials or changes in currency values.
  4. A fixed unit price contract sets a price per unit, but the exact number of units is not known.
  5. cost reimbursable plus fixed fee contract assures the contractor of a known fee.
  6. A cost reimbursable plus percentage fee calculates the fee as a percentage of the costs.
  7. A cost reimbursable plus incentive fee sets goals for the contractor to achieve that would result in a bonus.
  8. A cost reimbursable plus award fee is similar, but the goals are more subjective.
  9. Time and materials contracts pay for costs plus an hourly rate for the contractor’s time.

I haven’t work experience as a project manager, so I can suggest what type of contract would be my favourite to manage.

Q2 How can you handle changes requested by your clients after the project deliverables have been officially accepted?
A2:
It depends on the project’s level of complexity. On less complex projects, an informal discussion at project meetings can raise awareness that a decision needs to be reconsidered. On more complex projects, the action register and weekly project meetings provide a place to reconsider decisions. All the changes in the project should be documented.

Q3. Assume you are assigned to an international project, what kind of potential issues or challenges do you need to be aware of when you start to plan the project?
A3:

  • Language barriers
  • Communication
  • Cultural Dimensions
  • Time Zones
2 Likes
  • Fixed Price (Lump sum) Contracts: The seller and the buyer agree on a fixed price for the project.
  • Cost Reimbursable Contracts. What will you do if the scope of the work is not clear or not fully identified.
  • Time and Material Contracts or Unit Price Contracts.
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How can you handle changes requested by your clients after the project deliverable have been officially accepted?**

new contract

Assume you are assigned to an international project, what kind of potential issues or challenges do you need to be aware of when you start to plan the project?

technical issue
behavior issue
environmental issue

2 Likes
  1. In general, what types of project contracts exist? What are differences among them? As a project manager, what would be your most favorite contract to manage? Why?
    Answer: The following types of project contracts exist:
    • Fixed Price Contracts
    The fixed price contract is a legal agreement between the project organization and an entity (person or company) to provide goods or services to the project at an agreed-on price. The contract usually details the quality of the goods or services, the timing needed to support the project, and the price for delivering goods or services.

• Fixed Total Cost Contract
If the service provider is responsible for incorporating all costs, including profit, into the agreed-on price, it is a fixed total cost contract.

• Fixed Price with Price Adjustment
The fixed price contract with price adjustment is used for unusually long projects that span years. The most common use of this type of contract is the inflation-adjusted price.

• Fixed Price with Incentive Fee Contract
Fixed price with incentive fee is a contract type that provides an incentive for performing on the project above the established baseline in the contract. The contract might include an incentive for completing the work on an important milestone for the project.

• Fixed Unit Price
If the service or materials can be measured in standard units, but the amount needed is not known accurately, the price per unit can be fixed—a fixed unit price contract.

• Cost Reimbursable Contracts
In a cost reimbursable contract, the organization agrees to pay the contractor for the cost of performing the service or providing the goods. Cost reimbursable contracts are also known as cost plus contracts.

• Cost Reimbursable Contract with Fixed Fee
A cost reimbursable contract with a fixed fee provides the contractor with a fee or profit amount that is determined at the beginning of the contract and does not change.

• Cost Reimbursable Contract with Percentage Fee
A cost reimbursable contract with a percentage fee pays the contractor for costs plus a percentage of the costs, such as 5 percent of total allowable costs. The contractor is reimbursed for allowable costs and is paid a fee.

• Cost Reimbursable Contract with an Incentive Fee
A cost reimbursable contract with an incentive fee is used to encourage performance in areas critical to the project. Often the contract attempts to motivate contractors to save or reduce project costs.

• Time and Materials Contracts
On small activities that have a high uncertainty, the contractor might charge an hourly rate for labour, plus the cost of materials, plus a percentage of the total costs. This type of contract is called time and materials (T&M).
2. How can you handle changes requested by your clients after the project deliverables have been officially accepted?
Answer: Changes requested after official handover of project deliverables cannot be attended if the same clause is not mentioned in contract. The only way to address to the client request by preparation of new contract or amendment to the old contract.
3. Assume you are assigned to an international project, what kind of potential issues or challenges do you need to be aware of when you start to plan the project?
Answer: The potential issues for international project are:
• Changes in Inflation rate
• Statutory / Environmental issues
• Political Decisions & political relations

2 Likes
  1. The different types of Project Contracts that exist are:
    • Fixed Price Contracts:
    The fixed price contract is a legal agreement between the project organization and an entity (person or company) to provide goods or services to the project at an agreed-on price. The contract usually details the quality of the goods or services, the timing needed to support the project, and the price for delivering goods or services.

• Fixed Total Cost Contract:
If the service provider is responsible for incorporating all costs, including profit, into the agreed-on price, it is a fixed total cost contract.

• Fixed Price with Price Adjustment:
The fixed price contract with price adjustment is used for unusually long projects that span years. The most common use of this type of contract is the inflation-adjusted price.

• Fixed Price with Incentive Fee Contract:
Fixed price with incentive fee is a contract type that provides an incentive for performing on the project above the established baseline in the contract. The contract might include an incentive for completing the work on an important milestone for the project.

• Fixed Unit Price:
If the service or materials can be measured in standard units, but the amount needed is not known accurately, the price per unit can be fixed—a fixed unit price contract.

• Cost Reimbursable Contracts:
In a cost reimbursable contract, the organization agrees to pay the contractor for the cost of performing the service or providing the goods. Cost reimbursable contracts are also known as cost plus contracts.

• Cost Reimbursable Contract with Fixed Fee:
A cost reimbursable contract with a fixed fee provides the contractor with a fee or profit amount that is determined at the beginning of the contract and does not change.

• Cost Reimbursable Contract with Percentage Fee:
A cost reimbursable contract with a percentage fee pays the contractor for costs plus a percentage of the costs, such as 5 percent of total allowable costs. The contractor is reimbursed for allowable costs and is paid a fee.

• Cost Reimbursable Contract with an Incentive Fee:
A cost reimbursable contract with an incentive fee is used to encourage performance in areas critical to the project. Often the contract attempts to motivate contractors to save or reduce project costs.

• Time and Materials Contracts:
On small activities that have a high uncertainty, the contractor might charge an hourly rate for labour, plus the cost of materials, plus a percentage of the total costs. This type of contract is called time and materials (T&M).

2.Answer:
Changes requested after official handover of project deliverables cannot be attended if the same clause is not mentioned in the contract.
The only way to respond to the client’s request is by preparing a new contract or amendment to the old contract.

3.Answer:
The potential issues for international project are :
• Changes in Inflation rate
• Statutory / Environmental issues
• Political Decisions & political relations

2 Likes
  1. The different types of Project Contracts that exist are:
    • Fixed Price Contracts:
    The fixed price contract is a legal agreement between the project organization and an entity (person or company) to provide goods or services to the project at an agreed-on price. The contract usually details the quality of the goods or services, the timing needed to support the project, and the price for delivering goods or services.

• Fixed Total Cost Contract:
If the service provider is responsible for incorporating all costs, including profit, into the agreed-on price, it is a fixed total cost contract.

• Fixed Price with Price Adjustment:
The fixed price contract with price adjustment is used for unusually long projects that span years. The most common use of this type of contract is the inflation-adjusted price.

• Fixed Price with Incentive Fee Contract:
Fixed price with incentive fee is a contract type that provides an incentive for performing on the project above the established baseline in the contract. The contract might include an incentive for completing the work on an important milestone for the project.

• Fixed Unit Price:
If the service or materials can be measured in standard units, but the amount needed is not known accurately, the price per unit can be fixed—a fixed unit price contract.

• Cost Reimbursable Contracts:
In a cost reimbursable contract, the organization agrees to pay the contractor for the cost of performing the service or providing the goods. Cost reimbursable contracts are also known as cost plus contracts.

• Cost Reimbursable Contract with Fixed Fee:
A cost reimbursable contract with a fixed fee provides the contractor with a fee or profit amount that is determined at the beginning of the contract and does not change.

• Cost Reimbursable Contract with Percentage Fee:
A cost reimbursable contract with a percentage fee pays the contractor for costs plus a percentage of the costs, such as 5 percent of total allowable costs. The contractor is reimbursed for allowable costs and is paid a fee.

• Cost Reimbursable Contract with an Incentive Fee:
A cost reimbursable contract with an incentive fee is used to encourage performance in areas critical to the project. Often the contract attempts to motivate contractors to save or reduce project costs.

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There are a lot of obstacles to overcome when trying to deliver on a project. A change request will often come up throughout the course of most projects so it is a good idea to have a plan for how to handle them ahead of time.Therefore my own ways to handle it are as follows:
Request any supporting materials
Determine whether the change request is in inside or outside the scope
Have your team assess the priority of the change request
Approve or reject the change request
Decide on a course of action going forward

2 Likes
  1. In general, what types of project contracts exist? What are differences among them? As a project manager, what would be your most favorite contract to manage? Why?

Fixed Price Contract:

Legal agreement between the project organization and an entity (person or company) to provide goods or services to the project at an agreed-on price. The contract usually details the quality of the goods or services, the timing needed to support the project, and the price for delivering goods or services.

Fixed Total Contract:

Contractor assumes the risks for unexpected increases in labor and materials that are needed to provide the service or materials and in the quantity of time and materials needed.

Fixed Price Contract with Price Adjustment:

Used for unusually long projects that span years. The most common use of this type of contract is the inflation-adjusted price. In some countries, the value of its local currency can vary greatly in a few months, which affects the cost of local materials and labor. In periods of high inflation, the client assumes risk of higher costs due to inflation, and the contract price is adjusted based on an inflation index.

Fixed Price with Incentive Fee Contract:

Contract type that provides an incentive for performing on the project above the established baseline in the contract. The contract might include an incentive for completing the work on an important milestone for the project. Often contracts have a penalty clause if the work is not performed according to the contract.

Fixed Unit Price Contract:

Project team assumes the responsibility of estimating the number of units used. If the estimate is not accurate, the contract does not need to be changed, but the project will exceed the budgeted cost.

Cost Reimbursable Contracts:

Organization agrees to pay the contractor for the cost of performing the service or providing the goods. Cost reimbursable contracts are also known as cost plus contracts. Cost reimbursable contracts are most often used when the scope of work or the costs for performing the work are not well known.

Cost Reimbursable Contract with Fixed Fee:

Provides the contractor with a fee or profit amount that is determined at the beginning of the contract and does not change.

Cost Reimbursable Contract with a Percentage Fee:

Pays the contractor for costs plus a percentage of the costs, such as 5 percent of total allowable costs. The contractor is reimbursed for allowable costs and is paid a fee.

Cost Reimbursable Contract with an Incentive Fee:

Used to encourage performance in areas critical to the project. Often the contract attempts to motivate contractors to save or reduce project costs. The use of the cost reimbursable contract with an incentive fee is one way to motivate cost reduction behaviors.

Cost Plus Contract with Award Fee:

Award fee reimburses the contractor for all allowable costs plus a fee that is based on performance criteria. The fee is typically based on goals or objectives that are more subjective. An amount of money is set aside for the contractor to earn through excellent performance, and the decision on how much to pay the contractor is left to the judgment of the project team.

Time and Materials Contracts:

Time is usually contracted on an hourly rate basis and the contractor usually submits time sheets and receipts for items purchased on the project. The project reimburses the contractor for the time spent based on an agreed-on rate and the actual cost of the materials. The fee is typically a percent of the total cost.

ANSWER: As a project manager my favorite contract would be the Cost Reimbursable Contract with an Incentive Fee because it motives the contract to met milestone with an incentive, save/reduce cost on the project and some of the risk is share for both of us.

  1. How can you handle changes requested by your clients after the project deliverables have been officially accepted?

ANSWER: We would respond to the client’s request is by preparing a new contract or amendment to the old contract.

  1. Assume you are assigned to an international project, what kind of potential issues or challenges do you need to be aware of when you start to plan the project?

ANSWER: Inflation with local economy, Political relations and relations with local labor force & Any environmental issues for the area we are working in.

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There two types of contracts though further subdivided.
1a. Fixed price contracts: when the schedule and estimable cost of the project in known. The risk here price variation due to environmental or economic factors. The supplier bears high risk.

1b. Cost reimbursable contracts: where the cost of the project is not know but reimbursement of any additional cost agreements have been risked. This reduces the risk bore by the supplier.

1c. As a project manager, project situations and conditions will determine the type of contract I will choose to better handle the possible cost risk. If the project schedule is short, I will prefer fixed price contract with price adjustment to reduce any cost variation. While for long scheduled projects I will choose cost reimbursement contracts with incentives fee.

  1. A punch list will be designed to address this asap.

  2. Potential issues that may arise when awarded an international contract are but not limited to the list below :slight_smile:
    a. Labor cost of the country
    b. Cultural factor
    c. Economic factor
    d. Knowledge of environment of the project

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1. In general, what types of project contracts exist? What are differences among them? As a project manager, what would be your most favorite contract to manage? Why?
-Total fixed price contract
-A fixed price with incentive contract
A fixed unit price contract
-A cost reimbursement contrast

2. How can you handle changes requested by your clients after the project deliverables have been officially accepted?
new contract

3. Assume you are assigned to an international project, what kind of potential issues or challenges do you need to be aware of when you start to plan the project?
-technical issue
-behaviours issue
-environnementale issue

2 Likes