For example, Dwight is an agent for big hip-hop stars. His work is about negotiation. Dwight helps negotiate contracts for his artists. For Dwight, the final contract price clause is really the deciding factor of success or failure in his work. Dwight`s working on a contract today. He has reached the agreement and he is satisfied. This price is different from the one mentioned above: a payment per album, a payment per concert or turn, travel and accommodation, and some for the cost of living. Unlike the standard contract, Dwight knows that small differences have a significant impact. If he had even omitted the cost of living, his artist might have come out of the agreement not to show much. Dwight must maintain a constant state of consciousness to ensure that he does not make a mistake.
Dwight goes home and has a sigh of relief. Fixed-price contracts are common in many IT contexts, including project management, procurement and outsourcing. If the magnitude and costs are clearly defined from the outset, administrative time will be saved and much of the negotiation time required for less clear types of agreements will be avoided. However, the resources and time required to produce goods or provide services must be carefully controlled by the seller. Those who do not have considerable experience with similar efforts should be wary of fixed-price contracts, as it can be difficult for them to anticipate all the necessary resources and the duration of different tasks. Fixed-price contracts may be rigid or specify the circumstances under which adjustments can be made. A fixed-price contract (FFP) must provide products or services up to the agreed date and contractual payment. Unforeseen production costs must be borne by the seller.
Other variants of the model are fixed-price pricing contracts (FPIF), which offer the seller an additional payment for services beyond those provided by the agreement. The seller can provide. B or add features that go beyond the initial scope of the project. A fixed-price contract, also known as a lump sum contract, is an agreement between a seller and a customer who fixes goods and/or services that are provided and the price paid to them. The contract price, defined as the price of a contract paid after completion to a contractor, is used for each contract.