Answer Not Understood

 


A prime contractor in a customer project under CPFF contract has run into unexpected technical problems. Fixing them will require a lot of additional work to be done. 

The company made a decision to book more staff and equipment from their subcontractors in order to adhere to the agreed timeline. The customer agreed to this decision. 

What will most likely happen?
 
  The contractor‘s indirect costs will increase and the customer‘s payment for them will increase, too.
  The contractor‘s indirect costs will increase, but the customer‘s payment for them will not increase.
  The contractor‘s indirect costs will not increase, but the customer‘s payment for them will.
  Both the contractor's indirect costs and the customer‘s payment for them will not increase.


 

How the 4th choice can be the right answer ?

 

Hi Reeta,

to meet the time line the contractor books more staff and equipment, which are all direct costs to the project. There are no additional indirect costs which are to be paid.

 

Regards,

Pat