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Which of the following types of contracts allows the owner to transfer risk to the contractor?

 

A. cost plus fixed fee

B. cost sharing

C. cost plus incentive fee

D. performance guarantees

E. firm fixed price

 

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Question added by Muhammad Farooq , QA-QC MANAGER , AL Bawani contracting co.
Date Posted: 2016/07/15
Graeme McWaters
by Graeme McWaters , Quantity Surveyor , Veolia Westgarth Ltd

The answer would be E: Fixed Firm Price.

This is on the assumption that the quality of the Project Specifications is suitable to cover any potential deficiencies in the tender design, and that these Project Specifications form part of the Contract.  General terms of the Contract should state that the Contract Price included for all implications required by these Project Specifications.

Without the above being set in place correctly, there is no real transer of risk, as the owner would potentially be exposed to being hit with variations (if these risks came to fruition).  

Mohamed Helal
by Mohamed Helal , Project Manager , GROUP CONSULT INTERNATIONAL

E. firm fixed price...............

 

Terrence Walmsley
by Terrence Walmsley , Owner , The Awesome Group of Companies

Service contract. The detail needs to be specific with agreed parameters. 

Abu Bakar Siddique
by Abu Bakar Siddique , Procurement / Purchase Executive , Younone sports shoes Ind. LTD.

 

contractor allows the owners Cost plus fixed fee

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