Progressive Elaboration and T&M

 


OK, Here is my question of the day. Have not been able to find a explaination for this one.


 


When should a time and material contract with a contractor been chosen instead of a fixed price contract.


Answer:


When project scope includes the progressive elaboration of the scope of deliverables.


 


Question:


WHY


:-) Thanks

cnppmp's picture

You are choosing the Contract type as Buyer project manager, so when you do not have clear scope or no SOW it is better to go Cost Reimbursement with differemt flavours in it ot have more control the best one is CPFF. As you know this contract type is where buyer has more risk.


Now coming to T&M Contract type it is used again when you do not have clear scope and scope of work is not big, meaning low scale type of project, staff augment etc. The only difference here is the hourly rate has been decided by both buyer & seller, and with cap of budget very clearly defined, so that Buyer would go again into risk.


Considering "When project scope includes the progressive elaboration of the scope of deliverables'  As per my thought process what it implies to the question you have is, You have scope defined and approved and part of the project management plan, Also project objective in the project charter could describe  that phases of implementations for similar work being done in phases or could be roll-outs some thing like that, so buyer PM may think instead of going for Fixed Price for later scope fo the project , he may go for T&M, things are pretty clear and scope of work is not so large..


I do not know if I have put into right perpsective :-)


Regards


CN Patil

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