Procurement

Submitted by munishmsh on Tue, 07/05/2011 - 00:19

Hi


Can anyone explain the Contract table mentioned under Procurment chapter in Rita's book.


Contract Type                               Priorties (Least to Most Imp)


CPFF                                             Cost, Time, Performance
CPAF                                             Cost, Time, Performance
CPIF                                              Time, Performance, Cost
T&M                                               Performance,Time, Cost
FPIF                                               Time, Performance, Cost
FP                                                  Cost, Time, Performance  


Tried quite hard to understand how these priorties have been reached.


Regards
Msh

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admin

Tue, 07/05/2011 - 03:59

The priorities can be from either buyer or seller perspective


1. Cost reimburseable contracts - The main risk for buyer is that cost should be controlled . Hence it is number 1 priority in 1st two cases.  In CPIF , there is an incentive for buyer to complete before certain time and since time is of essense the seller is willing to give an incentive to complete early


 


2. In T&M contracts the key thing is to get the required performance from the resources. Since it directly translates into cost and time


3. FPIF - Same explaination as CPIF and in FP its obvious that cost plays the important role and in most cases buyers would not want to go anything over ceiling price and will expect the sellers to bear the burden of time overrrun or performance issues